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Senate File 402 - IntroducedA Bill ForAn Act 1prohibiting the state or a political subdivision of the
2state from entering into contracts with, or providing tax
3incentives or any other benefits to, certain companies that
4censor online content, and including effective date and
5applicability provisions.
6BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 15A.1, subsection 2, Code 2021, is
2amended by adding the following new paragraphs:
3 NEW PARAGRAPH. e. Whether a court has found by a
4preponderance of the evidence that the person to whom the funds
5will be dispersed has violated a provision of chapter 554E.
6 NEW PARAGRAPH. f. Whether the person to whom the funds will
7be dispersed is involved in litigation in which it has been
8alleged that the person has violated a provision of chapter
9554E.
10 Sec. 2. Section 24.17, subsection 2, Code 2021, is amended
11to read as follows:
122. a. One copy of the budget shall be retained on file
13in the office by the county auditor and the other shall be
14certified by the county auditor to the state board. The
15department of management shall certify the taxes back to the
16county auditor by June 15.
17b. For budgets for fiscal years beginning on or after
18July 1, 2021, if a political subdivision that is a city,
19county, school district, or township has been found to have
20intentionally violated a provision of chapter 554E during the
21twelve-month period prior to the date taxes are certified back
22to the county auditor under paragraph “a”, the amount of the
23political subdivision’s budget certified under this chapter and
24the amount of taxes certified back to the county auditor by
25the department of management shall be reduced by ten percent.
26If the political subdivision fails to remedy the violation
27of chapter 554E prior to the date of certification of taxes
28back to the county auditor by the department of management for
29the subsequent fiscal year, the percentage reduction of the
30political subdivision’s budget certified under this chapter and
31the amount of taxes certified back by the department of revenue
32shall be reduced by a percentage equal to the total reduction
33for the preceding fiscal year plus five percent.
34 Sec. 3. NEW SECTION. 554E.1 Definitions.
35As used in this chapter, unless the context otherwise
-1-1requires:
21. “Company” means and includes a person or an affiliate of
3a person who owns or operates any of the following:
4a. A massive online marketplace.
5b. A massive online video sharing website.
6c. A massive social networking website.
7d. A monopolistic entity.
8e. A pre-installed application store.
92. “Excessively violent content” means any image, video,
10or other content that, taking the material as a whole and
11applying contemporary community standards with respect to what
12is suitable for public distribution, meets all of the following
13criteria:
14a. Depicts or involves killing, maiming, dismembering, or
15sexually assaulting an individual.
16b. Lacks serious literary, scientific, political, or
17artistic value.
183. “Expressive merchandise” means and includes any tangible
19personal property that contains or displays a viewpoint that
20constitutes constitutionally protected speech.
214. “Governmental entity” means and includes all of the
22following:
23a. A unit of state government in the executive, legislative,
24or judicial branch.
25b. A political subdivision of the state, including a city,
26county, township, school district, and any other governmental
27entity authorized to levy taxes.
285. “Internet site” means the same as defined in section 4.1.
296. “Massive online marketplace” means and includes an
30internet site that meets all of the following criteria:
31a. Offers tangible personal property for sale to the general
32public.
33b. Sells or facilitates the sale of protected publications
34or expressive merchandise.
35c. Has at least seventy-five million subscribers or members
-2-1in the United States in the calendar year before the date a
2court has found by a preponderance of the evidence that the
3massive online marketplace violated this chapter, or has sold
4goods to at least seventy-five million individuals in the
5United States in the calendar year before the date a court
6has found by a preponderance of the evidence that the massive
7online marketplace has violated a provision of this chapter.
87. “Massive online video sharing website” means and includes
9an internet site that meets all of the following criteria:
10a. Allows users or the public to share videos with other
11users or the public.
12b. Hosts, stores, provides, or otherwise facilitates access
13by individuals in the United States.
14c. Has at least five hundred million videos available at any
15point in time.
168. “Massive social networking website” means and includes an
17internet site that meets all of the following criteria:
18a. Allows users, through the creation of pages within
19the internet site or profiles or by other means, to provide
20information about themselves that is available to the public
21or to other users.
22b. Allows users a mechanism for communication with other
23users.
24c. Has at least twenty million subscribers or members in
25the United States in the calendar year before the date a court
26has found by a preponderance of the evidence that the massive
27social networking website has violated a provision of chapter
28554E, or has been used by at least twenty million individuals
29in the United States in the calendar year before the date a
30court has found by a preponderance of the evidence that the
31massive social networking website has violated a provision of
32this chapter.
339. “Monopolistic entity” means and includes all of the
34following:
35a. A person who, within the ten-year period preceding the
-3-1date a court has found by a preponderance of the evidence
2that the person has violated a provision of this chapter, has
3been found to have violated any state or federal antitrust or
4price-fixing law.
5b. A person who is involved in litigation in which it has
6been alleged that the person has violated any state or federal
7antitrust or price-fixing law.
810. “Obscene material” means any material depicting or
9describing the genitals, sex acts, masturbation, excretory
10functions, or sadomasochistic abuse which the average person,
11taking the material as a whole and applying contemporary
12community standards with respect to what is suitable material
13for minors, would find appeals to the prurient interest and is
14patently offensive; and the material, taken as a whole, lacks
15serious literary, scientific, political, or artistic value.
1611. “Person” means the same as defined in section 4.1.
1712. “Pre-installed application store” means and includes
18any program, application, service, or mechanism that is
19pre-installed on a mobile telephone or other portable
20electronic communication device capable of being used to write,
21send, or view an electronic message that meets all of the
22following criteria:
23a. Facilitated at least one hundred million annual downloads
24of programs or applications by individuals in the United
25States in the calendar year before the date a court has found
26by a preponderance of the evidence that the pre-installed
27application store has violated a provision of this chapter.
28b. Facilitated the download of programs or applications
29that constitute a massive online marketplace, massive online
30video sharing website, or massive social networking website
31in the calendar year before the date a court has found by
32a preponderance of the evidence that the pre-installed
33application store has violated a provision of this chapter.
3413. “Protected publication” means and includes any
35newspaper, non-fiction book, periodical, religious text, or any
-4-1other publication that contains or displays a viewpoint that
2constitutes constitutionally protected speech.
314. “Social networking website” means and includes an
4internet site that meets all of the following criteria:
5a. Allows users, through the creation of pages within
6the internet site or profiles or by other means, to provide
7information about themselves that is available to the public
8or to other users.
9b. Allows users a mechanism for communication with other
10users.
11 Sec. 4. NEW SECTION. 554E.2 Prohibition on censorship —
12ability to opt out of certain algorithms.
131. a. A company shall not intentionally affect the ability
14of a citizen of this state to view, comment, or otherwise
15interact with a United States citizen’s content on the
16company’s internet site by limiting, blocking, or otherwise
17restricting any content on the company’s internet site if the
18content constitutes constitutionally protected speech.
19b. A company shall not intentionally restrict the ability of
20a citizen of this state to download a social networking website
21on a pre-installed application store.
22c. A company shall not intentionally restrict the ability of
23a citizen of this state to purchase any protected publication
24or expressive merchandise on a massive online marketplace
25if similar protected publications or expressive merchandise
26were allowed for sale on the massive online marketplace at
27the time the company restricted the ability of a citizen of
28this state to purchase the protected publication or expressive
29merchandise.
302. Notwithstanding subsection 1, a company may do any of the
31following:
32a. Restrict the ability of a citizen of this state to
33view, comment, or otherwise interact with a United States
34citizen’s content on the company’s internet site if the
35content is criminal in nature, if the content does not
-5-1constitute constitutionally protected speech, or if the content
2constitutes any of the following:
3(1) Obscene material.
4(2) Excessively violent content.
5b. Restrict the ability of a citizen of this state to
6download a social networking website program or application
7from a pre-installed application store if the social networking
8website is being used for criminal activity and the social
9networking website does not have a policy in place to require
10its employees to notify law enforcement upon receiving a
11complaint or otherwise becoming aware of the criminal activity
12being discussed or conducted on its social networking website,
13or does not have a policy in place to require its employees
14to refer the complaint or existence of criminal activity to
15designated employees that carry out the policy.
163. a. A company shall provide its subscribers, members, and
17users who are citizens of this state with the ability to opt
18out of post promoting algorithms and shadow banning algorithms
19on the company’s massive online marketplace, massive online
20video sharing website, or massive social networking website.
21b. For purposes of this subsection:
22(1) “Post promoting algorithm” means and includes the
23mechanism, process, or set of rules that is used to sort the
24content that is visible to a subscriber, member, or user based
25on data or information possessed, used, or controlled by a
26company which relates to the subscriber, member, or user.
27(2) “Shadow banning algorithm” means and includes the
28mechanism, process, or set of rules that is used to restrict
29the visibility of a subscriber’s, member’s, or user’s content
30to other subscribers, members, or users in a way that is not
31readily apparent to the subscriber, member, or user who created
32the content.
33 Sec. 5. NEW SECTION. 554E.3 Enforcement — companies.
341. a. A court’s finding by a preponderance of the evidence
35that a company has violated a provision of this chapter shall
-6-1be conclusive proof of the company’s breach of any agreement
2between the company and a governmental entity in effect as of
3the effective date of this Act, and the governmental entity
4shall cancel the agreement effective as of the date the company
5receives the notice the governmental entity provides pursuant
6to section 554E.4, subsection 1, paragraph “b”, or if the
7governmental entity fails to send the notice, the governmental
8entity shall cancel the agreement effective thirty days after
9the effective date of this Act. Nothing in this subsection
10shall be interpreted to provide a company that did not receive
11notice a defense to a suit alleging a violation of this
12chapter or a defense to a suit alleging the company breached an
13agreement with the governmental entity.
14b. A court’s finding by a preponderance of the evidence
15that a company has violated a provision of this chapter shall
16be conclusive proof of the company’s breach of any agreement
17between the company and a governmental entity entered into
18after the effective date of this Act, and the governmental
19entity shall cancel the agreement effective as of the date of
20the court’s finding.
212. Notwithstanding any other provision of law to the
22contrary, upon a court’s finding by a preponderance of the
23evidence that a company has violated a provision of this
24chapter, the company shall be prohibited from entering into
25any future agreement with a governmental entity and shall be
26prohibited from receiving any future payments; tax credits;
27assistance under section 15.335B; sales tax exemptions or
28refunds under chapter 423; property tax credits, exemptions,
29including but not limited to exemptions under chapter 427,
30rebates, refunds, reimbursements, or grants for property taxes
31paid; or any other special benefits from a governmental entity.
32The prohibition provided in this subsection shall begin on the
33date of the court’s finding. Except as provided in section
34554E.7, the prohibition shall be for a period of twenty years.
35The twenty-year prohibition shall be reinstated for each
-7-1subsequent finding by a court pursuant to this subsection.
23. Notwithstanding any other provision of law to the
3contrary, upon a court’s finding by a preponderance of the
4evidence that a company has violated a provision of this
5chapter all of the following shall apply:
6a. Tax credits; assistance from programs and funds under
7section 15.335B; sales tax exemptions or refunds under chapter
8423; property tax credits, exemptions, including but not
9limited to exemptions under chapter 427, rebates, refunds,
10reimbursements, or grants for property taxes paid; or any
11other special benefits previously claimed by the company
12shall be recaptured or terminated by the governmental entity.
13The recapture or termination of any tax credits; assistance
14under section 15.335B; sales tax exemptions or refunds under
15chapter 423; property tax credits, exemptions, including but
16not limited to exemptions under chapter 427, rebates, refunds,
17reimbursements, or grants for property taxes paid; or any other
18special benefits previously claimed by the company pursuant
19to this subsection shall supersede any agreement previously
20entered into with the governmental entity. Recapture or
21termination pursuant to this subsection shall be accomplished
22in the same manner as provided in section 15.330, subsection
232, by the method for resolving a breach described in the
24agreement, through court action, or any other means determined
25by the attorney general to result in the most expeditious
26recapture or termination of tax credits; assistance under
27section 15.335B; sales tax exemptions or refunds under chapter
28423; property tax credits, exemptions, including but not
29limited to exemptions under chapter 427, rebates, refunds,
30reimbursements, or grants for property taxes paid; or any other
31special benefits previously claimed by the company.
32b. Payments or other quantifiable benefits received but not
33earned by the company shall be returned to the governmental
34entity.
354. Upon a court’s finding by a preponderance of the evidence
-8-1that a company has violated a provision of this chapter, the
2prohibition provided in subsection 1 and the return of received
3but not earned amounts provided in subsection 3 shall not be
4stayed during appeal proceedings.
5 Sec. 6. NEW SECTION. 554E.4 Inventory of agreements with
6companies — obligations.
71. Within thirty days following the effective date of this
8Act, a governmental entity shall do all of the following:
9a. Conduct a review of currently effective agreements;
10tax credits; assistance under section 15.335B; sales tax
11exemptions or refunds under chapter 423; property tax credits,
12exemptions, including but not limited to exemptions under
13chapter 427, rebates, refunds, reimbursements, or grants for
14property taxes paid; or any other special benefits provided by
15the governmental entity beginning January 1, 2001, through the
16effective date of this Act, to determine if any agreements, tax
17credits; assistance under section 15.335B; sales tax exemptions
18or refunds under chapter 423; property tax credits, exemptions,
19including but not limited to exemptions under chapter 427,
20rebates, refunds, reimbursements, or grants for property taxes
21paid; or any other special benefits were entered into with, or
22provided to, a company.
23b. Provide notice to a company on the form provided by the
24office of the attorney general pursuant to subsection 3, of
25the governmental entity’s rights pursuant to section 554E.3 by
26certified mail return receipt requested if the governmental
27entity determines pursuant to subsection 1 that a currently
28effective agreement; tax credit; assistance under section
2915.335B; sales tax exemption or refund under chapter 423;
30property tax credit, exemption, including but not limited to
31an exemption under chapter 427, rebate, refund, reimbursement,
32or grant for property taxes paid; or any other special benefit
33was entered into with, or provided to, the company beginning
34January 1, 2001, through the effective date of this Act.
35c. Provide the office of the attorney general with copies of
-9-1the notice and receipt of delivery provided in subsection 2.
22. A governmental entity shall include in all agreements
3to which it is a party entered into on or after the effective
4date of this Act a statement summarizing the governmental
5entity’s enforcement rights under section 554E.3 with respect
6to agreements; tax credits; assistance under section 15.335B;
7sales tax exemptions or refunds under chapter 423; property tax
8credits, exemptions, including but not limited to exemptions
9under chapter 427, rebates, refunds, reimbursements, or grants
10for property taxes paid; or any other special benefits.
113. The office of the attorney general shall develop and
12provide to governmental entities a form to be used for the
13notice provided in subsection 2 within seven days of the
14effective date of this Act.
15 Sec. 7. NEW SECTION. 554E.5 Enforcement — governmental
16entities.
17Notwithstanding any other provision of law to the contrary,
18upon a court’s finding by a preponderance of the evidence that
19a governmental entity intentionally violated a provision of
20this chapter, including but not limited to by making payments
21or providing tax credits; assistance under section 15.335B;
22sales tax exemptions or refunds under chapter 423; property tax
23credits, exemptions, including but not limited to exemptions
24under chapter 427, rebates, refunds, reimbursements, or grants
25for property taxes paid; or any other special benefits in
26violation of section 554E.3, all of the following shall apply:
271. The governmental entity’s certified budget and amount of
28taxes certified shall be reduced as provided in section 24.17,
29subsection 2, paragraph “b”.
302. If the governmental entity receives an appropriation,
31the governmental entity’s portion of each appropriation in the
32fiscal year of the court’s finding of an intentional violation
33shall be reduced by ten percent. If the governmental entity
34fails to remedy the violation of this chapter prior to the
35beginning of the subsequent fiscal year, the governmental
-10-1entity’s portion of each appropriation made by the general
2assembly for the subsequent fiscal year shall be reduced by a
3percentage equal to the percentage reduction for the preceding
4fiscal year plus five percent. All appropriation amounts
5reduced pursuant to this section shall be transferred to the
6fund from which they were appropriated.
7 Sec. 8. NEW SECTION. 554E.6 Obligations of the office of
8the attorney general.
91. The office of the attorney general shall enforce
10the provisions of this chapter, including in all appeal
11proceedings.
12a. The office of the attorney general shall appeal a
13district court’s decision if a company prevails in the district
14court in an action under this chapter.
15b. The office of the attorney general shall file an
16application for further review with the supreme court if, after
17the appeal provided in paragraph “a”, the supreme court issues
18an order of transfer and transfers the case to the court of
19appeals and the company prevails in the action before the court
20of appeals.
21c. When an appeal is taken by the office of the attorney
22general, the office shall not be required to give an appeal
23bond or security for costs.
242. a. Within sixty days following the effective date
25of this Act, the office of the attorney general shall make
26available on its internet site a system to allow a citizen of
27this state to report potential violations of this chapter by a
28company or by a governmental entity to the office.
29b. The system required pursuant to paragraph “a” shall
30include all of the following:
31(1) A mechanism for the electronic submission of
32photographs or other evidence of a company’s potential
33violation of this chapter.
34(2) An annual accounting, on a calendar year basis, of the
35number of complaints received by the office of the attorney
-11-1general related to the number of potential violations of this
2chapter by companies and governmental entities. In addition
3to the current year’s accounting, the system shall display
4annual accountings required by this subparagraph for the years
5preceding the current calendar year.
6(3) An annual accounting, on a calendar year basis, of the
7number of investigations required pursuant to subsections 3
8and 4 in which the office of the attorney general determines
9there is a reasonable suspicion that a company or governmental
10entity violated this chapter. In addition to the current
11year’s accounting, the system shall display annual accountings
12required by this subparagraph for the years preceding the
13current calendar year.
14(4) A list of the companies that a court has found by a
15preponderance of the evidence have violated this chapter.
16(5) A list of the governmental entities that a court has
17found by a preponderance of the evidence have violated this
18chapter.
19(6) A mechanism to ensure that the person submitting the
20report is a citizen of this state.
213. Notwithstanding subsection 5, the office of the attorney
22general shall complete the investigation of a report received
23pursuant to subsection 2 within thirty days of the receipt
24of the report if the report included a photograph or other
25evidence that, in the opinion of the office, indicates a
26company’s potential violation of this chapter.
274. The office of the attorney general shall contact a person
28who submits a report pursuant to subsection 2 related to a
29company’s potential violation of this chapter that did not
30contain a photograph or other evidence within seven days of
31the receipt of the report and inform the person of one of the
32following:
33a. The office will investigate the report, in which case the
34office shall complete the investigation within thirty days of
35the receipt of the report.
-12- 1b. The person has thirty days to provide the office with
2a photograph or other evidence that indicates a potential
3violation of this chapter, in which case the office shall
4complete the investigation within thirty days of the receipt of
5the photograph or other evidence.
65. a. Upon completion of an investigation in which
7the office of the attorney general determines there is a
8reasonable suspicion that a company or governmental entity has
9violated this chapter, the office shall file suit in a court
10of competent jurisdiction to enforce the provisions of this
11chapter.
12b. The office of the attorney general shall file suit for a
13violation of this chapter every four years from the date of the
14most recent court’s finding if the office determines there is
15reasonable suspicion that a company has violated this chapter
16at any point during the four-year period after the court’s most
17recent finding.
18c. The office of the attorney general shall file suit to
19enforce this chapter against a governmental entity every year
20from the date of the most recent court’s finding that the
21governmental entity has violated this chapter if the office
22determines there is reasonable suspicion that a violation of
23this chapter has occurred at any point during the one-year
24period after the court’s most recent finding.
256. All records provided to the office of the attorney
26general pursuant to this section shall be kept confidential and
27are not subject to chapter 22.
28 Sec. 9. NEW SECTION. 554E.7 Petition for stay.
291. No sooner than four years after a court’s finding that
30a company violated a provision of this chapter pursuant to
31section 554E.3, the company may petition the court for a stay
32of the provisions of section 554E.3, subsection 1.
332. At the time the company petitions the court for a stay
34pursuant to subsection 1, the company shall file with the court
35a bond payable to the state in an amount deemed necessary by
-13-1the office of the attorney general.
23. Within thirty days after a company files a petition for
3a stay pursuant to subsection 1, the office of the attorney
4general shall file with the court a statement indicating any
5reports received under section 554E.6, subsection 2, related
6to the company from the date of the court’s finding that
7the company violated a provision of this chapter pursuant to
8section 554E.3 through the date the company filed the petition
9for a stay.
104. The court shall grant the petition for stay filed
11pursuant to subsection 1 if it finds that the company did not
12violate the provisions of this chapter from the date of the
13court’s finding that the company violated a provision of this
14chapter pursuant to section 554E.3 through the date the company
15filed the petition for a stay.
16a. Beginning one year after the court grants the petition
17for stay pursuant to this subsection, the company shall
18annually file with the court an additional bond in the amount
19of any payments; tax credits; assistance under section 15.335B;
20sales tax exemptions or refunds under chapter 423; property tax
21credits, exemptions, including but not limited to exemptions
22under chapter 427, rebates, refunds, reimbursements, or grants
23for property taxes paid; or any other special benefits the
24company received from the state during the previous year.
25b. A governmental entity shall not make any payments to
26the company, or provide the company with any tax credits;
27assistance under section 15.335B; sales tax exemptions or
28refunds under chapter 423; property tax credits, exemptions,
29including but not limited to exemptions under chapter 427,
30rebates, refunds, reimbursements, or grants for property taxes
31paid; or any other special benefits, until the company has
32satisfied the requirements in paragraph “a” for the previous
33year.
345. The company shall be permanently prohibited from
35entering into any agreement with a governmental entity and
-14-1shall be permanently prohibited from receiving any payments;
2tax credits; assistance under section 15.335B; sales tax
3exemptions or refunds under chapter 423; property tax credits,
4exemptions, including but not limited to exemptions under
5chapter 427, rebates, refunds, reimbursements, or grants for
6property taxes paid; or any other special benefits from a
7governmental entity if the company violates a provision of
8this chapter after a court has granted the company’s petition
9for stay pursuant to this section and before the end of the
10twenty-year prohibition provided in section 554E.3, subsection
111.
126. The amount of any bond forfeited under this section shall
13be deposited in the general fund of the state.
147. A company shall not file more than one petition for
15a stay of the provisions of section 554E.3, subsection 1,
16during the twenty-year prohibition provided in section 554E.3,
17subsection 1.
188. Nothing in this section shall be construed to limit the
19authority of the office of the attorney general under section
20554E.6 to investigate potential violations of this chapter or
21file suit to enforce the provisions of this chapter.
22 Sec. 10. NEW SECTION. 554E.8 Right to intervene —
23enforcement by citizens of this state.
241. A governmental entity impacted by an action under this
25chapter may intervene in any action under this chapter.
262. A citizen of this state who has reported a company’s
27potential violation of this chapter pursuant to section 554E.6
28may intervene in any action related to the company under this
29chapter.
303. Notwithstanding section 554E.6, subsection 1, a citizen
31of this state who has reported a company’s potential violation
32of this chapter pursuant to section 554E.6 may file suit in a
33court of competent jurisdiction to enforce the provisions of
34this chapter if the company is not currently subject to the
35prohibition provided in section 554E.3, subsection 2, and if
-15-1the company’s potential violation of this chapter occurred at
2least thirty days following the effective date of this Act.
3 Sec. 11. NEW SECTION. 554E.9 Rules.
4The office of the attorney general shall adopt rules
5pursuant to chapter 17A to administer and interpret this
6chapter.
7 Sec. 12. LEGISLATIVE FINDINGS AND LEGISLATIVE INTENT. The
8general assembly finds all of the following:
91. The United States Constitution and the Constitution of
10the State of Iowa guarantee citizens of this state the freedom
11of speech.
122. The ability of citizens of this state to voice their
13opinions on matters that impact themselves or society generally
14is of paramount importance in order to have a healthy,
15functioning, and inclusive democracy in which every citizen can
16participate.
173. Freedom of speech is not only necessary in order
18for every citizen of this state to feel included in their
19representative democracy, but also necessary for there to be
20free and open debate so society can improve its knowledge,
21understanding, and perspective on issues that impact science,
22religion, academia, public officials, and public policy
23generally, regardless of how popular or unpopular any
24particular person, entity, speech, idea, or opinion may be.
254. The purpose of guaranteeing the freedom of speech in the
26United States Constitution and Constitution of the State of
27Iowa is to protect the people from government to ensure that
28no one person, group, or entity controls what individuals or
29society see as the truth, controls what individuals or society
30are allowed to believe or think, or controls what is and is not
31open for debate.
325. Without freedom of speech, free and open debate, and
33freedom of thought in society, individuals begin to lose faith
34and trust in science, religion, academia, public officials, and
35the legitimacy of their representative government.
-16- 16. The majority of individuals and entities voice their
2support, opposition, or opinions on science, religion,
3academics, public officials, and public policy through the
4internet.
57. A majority of individuals and entities now receive
6information and opinions about science, religion, academia,
7public officials, and public policy through the internet.
88. It can be safely concluded that the public forum where
9individuals, entities, and society generally debate the issues,
10voice their support, opposition, or opinions, obtain and
11receive information, and learn about current events has largely
12moved from the physical public square and print materials
13distributed locally, to the internet through companies.
149. Congress has provided civil immunity to many companies
15through 47 U.S.C.§230 (the Communications Decency Act),
16which allows those companies to flourish by treating them
17as distributors of information instead of publishers of
18information, which allows the companies to label, reduce
19distribution, or remove information on their platforms,
20websites, marketplaces, application stores, and the internet
21generally.
2210. Certain companies have exploited and abused the
23Communications Decency Act to the point where many citizens of
24this state are losing faith and trust in science, religion,
25academia, public officials, public policy generally, and the
26legitimacy of their representative government at all levels.
2711. Certain companies that exploit and abuse the
28Communications Decency Act have grown to such an extent that
29they dominate the marketplace such that citizens of this
30state have no real alternatives if they do not agree with the
31information moderation policies used by those companies, are
32disallowed from voicing their opinions on the platforms created
33by the companies, have their opinions and thoughts hidden
34from the general public, or are disallowed from having their
35publications sold to the general public in online marketplaces.
-17- 112. Members of Congress belonging to both parties have known
2about these abuses and exploitations of the Communications
3Decency Act for years, and congressional committees have
4released reports detailing these exploitations and abuses,
5but Congress has done nothing to reduce or prevent them from
6continuing in the future.
713. Near the end of his presidency, President Donald J.
8Trump attempted to force Congress to prevent any future harm
9caused by the continued ability of companies to exploit and
10abuse the Communications Decency Act by vetoing the National
11Defense Authorization Act, but Congress decided to override
12President Trump’s veto instead of preventing the harm and abuse
13from continuing by repealing or amending the Communications
14Decency Act.
1514. The general assembly does not have the authority to
16enact any law that is inconsistent with the Communications
17Decency Act.
1815. The general assembly does have the ability to ensure
19that the state and its political subdivisions do not give any
20taxpayer money, tax incentives, or any other benefit to the
21companies causing harm to our society by exploiting and abusing
22the Communications Decency Act.
2316. It is the intent of the general assembly that this
24Act be interpreted broadly to prevent taxpayer money, tax
25incentives, or any other benefits from being awarded to the
26companies that are the subject of this Act.
27 Sec. 13. TRANSITIONAL COMPLAINT REPORTING SYSTEM. Within
28thirty days following the effective date of this Act, and until
29fifty-nine days following the effective date of this Act, the
30office of the attorney general shall make available on its
31internet site a transitional system to allow a citizen of
32this state to report potential violations of chapter 554E by
33a company or a governmental entity to the office. The system
34shall include, at a minimum, a mechanism for the electronic
35submission of reports of potential violations of chapter 554E
-18-1and the electronic evidence associated with the potential
2violations.
3 Sec. 14. IMPLEMENTATION OF ACT. Section 25B.2, subsection
43, shall not apply to this Act.
5 Sec. 15. EFFECTIVE DATE. This Act, being deemed of
6immediate importance, takes effect upon enactment.
7 Sec. 16. APPLICABILITY. This Act applies to agreements
8between a company and a governmental entity in effect or
9entered into on or after the effective date of this Act.
10EXPLANATION
11The inclusion of this explanation does not constitute agreement with
12the explanation’s substance by the members of the general assembly.
13This bill prohibits the state or political subdivisions of
14the state from entering into contracts with, or providing tax
15incentives or any other benefits to, certain companies that
16censor online content.
17The bill requires that, before public funds are used for
18economic development, the public body dispensing the public
19funds shall consider whether a court has found that the person
20to whom the funds will be dispersed has violated a provision
21of new Code chapter 554E, and whether the person is involved
22in litigation in which it has been alleged that the person
23violated Code chapter 554E.
24The bill modifies Code section 24.17 to provide that, for
25fiscal years beginning on or after July 1, 2021, if a political
26subdivision has been found to have violated new Code chapter
27554E during the 12-month period prior to the date taxes are
28certified, the amount of the political subdivision’s budget
29certified under Code chapter 24 and the amount of taxes
30certified back to the county auditor by the department of
31management shall be reduced as described in the bill.
32The bill establishes new Code chapter 554E. The bill
33adds several defined terms to the Code chapter, including
34definitions for “company”, “excessively violent content”,
35“expressive merchandise”, “governmental entity”, “internet
-19-1site”, “massive online marketplace”, “massive online video
2sharing website”, “massive social networking website”,
3“monopolistic entity”, “obscene material”, “pre-installed
4application store”, and “social networking website”.
5The bill prohibits a company from intentionally affecting
6the ability of a citizen of this state to view, comment, or
7otherwise interact with certain content on the company’s
8internet site by restricting such content.
9The bill prohibits a company from intentionally affecting
10the ability of a citizen of this state to interact with
11certain content on the company’s internet site, restricting
12the ability of a citizen of this state to download a social
13networking website on a pre-installed application store, or
14restricting the ability of a citizen of this state to purchase
15any protected publication or expressive merchandise on a
16massive online marketplace as prescribed in the bill. The bill
17provides, however, that a company may restrict the ability
18of a citizen of this state to interact with a United States
19citizen’s content on the company’s internet site in certain
20enumerated cases.
21The bill requires a company to provide its subscribers,
22members, and users who are citizens of this state with
23the ability to opt out of post promoting algorithms and
24shadow banning algorithms on the company’s massive online
25marketplace, massive online video sharing website, or massive
26social networking website. The bill defines “post promoting
27algorithm” and “shadow banning algorithm”.
28The bill provides that a court’s finding that a company has
29violated the prohibition on censorship shall be conclusive
30proof of the company’s breach of any agreement between the
31company and a governmental entity, and the governmental entity
32shall cancel the agreement.
33The bill provides that, upon a court’s finding that a company
34has violated this prohibition on censorship, the company shall
35be prohibited from entering into any future agreement with a
-20-1governmental entity and shall be prohibited from receiving
2any future payment or any other benefit from a governmental
3entity. The bill establishes that this begins on the date of
4the court’s finding and shall extend for a period of 20 years,
5unless a stay is granted pursuant to the terms of Code section
6554E.7. Additionally, the bill establishes that this 20-year
7prohibition shall be reinstated for each subsequent finding by
8a court that a company violated the prohibition on censorship.
9The bill provides that, upon a court’s finding that a company
10has violated the prohibition on censorship, tax credits;
11assistance under Code section 15.335B; sales tax exemptions
12or refunds; property tax rebates, refunds, reimbursements, or
13grants for property taxes paid; and any other special benefits
14previously claimed by the company shall be recaptured as
15provided in the bill.
16The bill provides that the prohibition on entering into any
17agreement with a governmental entity and the requirement that
18unearned amounts be returned to governmental entities shall not
19be stayed during appeal proceedings.
20The bill requires a governmental entity to take certain
21enumerated steps with respect to companies it may have
22agreements with within 30 days of the effective date of this
23bill. The bill also requires a governmental entity to include
24in its contracts a statement summarizing the governmental
25entity’s enforcement rights under Code section 554E.3. The
26bill requires the office of the attorney general to develop a
27form describing these enforcement rights within seven days of
28the effective date of the bill.
29The bill provides that if a governmental entity
30intentionally violates Code chapter 554E, certain financial
31penalties will apply.
32The bill requires the attorney general to enforce the
33provisions of Code chapter 554E. The bill requires the
34attorney general to appeal a district court’s decision if a
35company prevails in the district court in an action under Code
-21-1chapter 554E. Additionally, the bill requires the attorney
2general to file an application for further review with the
3supreme court if, after the first appeal, the supreme court
4transfers the case to the court of appeals and the company
5prevails in the action before the court of appeals.
6The bill provides that, within 60 days of the effective
7date of the bill, the attorney general shall make available on
8its internet site a system to allow a citizen of this state to
9report potential violations of Code chapter 554E by a company
10or by a governmental entity. The bill requires this system
11to include several features. The bill establishes certain
12investigative responsibilities of the attorney general with
13respect to reports submitted through this system. The bill
14requires the attorney general to file suit in a court of
15competent jurisdiction to enforce the provisions of the Code
16chapter. The bill requires the attorney general to file suit
17for a violation of the Code chapter every four years from the
18date of the most recent court’s finding if the attorney general
19determines there is reasonable suspicion that a company has
20violated a provision of the Code chapter at any point during
21the four-year period after the court’s most recent finding.
22Additionally, the bill requires the attorney general to file
23suit to enforce the Code chapter against a governmental entity
24every year from the date of the most recent court’s finding
25that the governmental entity has violated the Code chapter if
26the office determines there is a reasonable suspicion that a
27violation of this chapter has occurred at any point during the
28one-year period after the court’s most recent finding. The
29bill provides that all records provided to the attorney general
30under Code section 554E.6 shall be kept confidential and are
31not subject to Code chapter 22.
32The bill authorizes companies that have been found to have
33violated a provision of Code chapter 554E to petition the court
34for a stay of the provisions of the Code chapter. The bill
35prescribes when this petition may be filed, how many petitions
-22-1may be filed, bonding requirements, statements that the
2attorney general must file, when a court may grant the stay,
3and what occurs in the event a company violates the provisions
4of this Code chapter again after a stay has been granted.
5The bill establishes that governmental entities impacted by
6an action under Code chapter 554E may intervene in an action
7under the Code chapter. Additionally, the bill establishes
8that a citizen of this state who has reported a company’s
9violation of the bill to the attorney general may intervene
10in any action related to that company under the Code chapter.
11The bill authorizes a citizen of this state who has reported
12a company’s violation of the bill to file suit to enforce the
13provisions of the Code chapter if the company is not currently
14subject to the prohibition provided in Code section 554E.3,
15subsection 2, and if the company’s potential violation of the
16Code chapter occurred at least 30 days following the effective
17date of the bill.
18The bill may include a state mandate as defined in Code
19section 25B.3. The bill makes inapplicable Code section 25B.2,
20subsection 3, which would relieve a political subdivision from
21complying with a state mandate if funding for the cost of
22the state mandate is not provided or specified. Therefore,
23political subdivisions are required to comply with any state
24mandate included in the bill.
25The bill authorizes the attorney general to adopt rules to
26administer and interpret Code chapter 554E.
27The bill requires the attorney general to create a
28transitional reporting system within 30 days following the
29effective date of the bill that will operate until 59 days
30following the effective date of the bill. The bill requires
31the transitional reporting system to include, at a minimum, a
32mechanism for the electronic submission of reports of potential
33violations of chapter 554E and the electronic evidence
34associated with the potential violations.
35The bill contains legislative findings and legislative
-23-1intent provisions. The provisions provide that the bill
2should be interpreted broadly to prevent taxpayer money, tax
3incentives, or any other benefits from being awarded to the
4companies that are the subject of the bill.
5The bill takes effect upon enactment and applies to
6agreements between a company and a governmental entity in
7effect or entered into on or after the effective date of the
8bill.
-24-jda/rn
2state from entering into contracts with, or providing tax
3incentives or any other benefits to, certain companies that
4censor online content, and including effective date and
5applicability provisions.
6BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 15A.1, subsection 2, Code 2021, is
2amended by adding the following new paragraphs:
3 NEW PARAGRAPH. e. Whether a court has found by a
4preponderance of the evidence that the person to whom the funds
5will be dispersed has violated a provision of chapter 554E.
6 NEW PARAGRAPH. f. Whether the person to whom the funds will
7be dispersed is involved in litigation in which it has been
8alleged that the person has violated a provision of chapter
9554E.
10 Sec. 2. Section 24.17, subsection 2, Code 2021, is amended
11to read as follows:
122. a. One copy of the budget shall be retained on file
13in the office by the county auditor and the other shall be
14certified by the county auditor to the state board. The
15department of management shall certify the taxes back to the
16county auditor by June 15.
17b. For budgets for fiscal years beginning on or after
18July 1, 2021, if a political subdivision that is a city,
19county, school district, or township has been found to have
20intentionally violated a provision of chapter 554E during the
21twelve-month period prior to the date taxes are certified back
22to the county auditor under paragraph “a”, the amount of the
23political subdivision’s budget certified under this chapter and
24the amount of taxes certified back to the county auditor by
25the department of management shall be reduced by ten percent.
26If the political subdivision fails to remedy the violation
27of chapter 554E prior to the date of certification of taxes
28back to the county auditor by the department of management for
29the subsequent fiscal year, the percentage reduction of the
30political subdivision’s budget certified under this chapter and
31the amount of taxes certified back by the department of revenue
32shall be reduced by a percentage equal to the total reduction
33for the preceding fiscal year plus five percent.
34 Sec. 3. NEW SECTION. 554E.1 Definitions.
35As used in this chapter, unless the context otherwise
-1-1requires:
21. “Company” means and includes a person or an affiliate of
3a person who owns or operates any of the following:
4a. A massive online marketplace.
5b. A massive online video sharing website.
6c. A massive social networking website.
7d. A monopolistic entity.
8e. A pre-installed application store.
92. “Excessively violent content” means any image, video,
10or other content that, taking the material as a whole and
11applying contemporary community standards with respect to what
12is suitable for public distribution, meets all of the following
13criteria:
14a. Depicts or involves killing, maiming, dismembering, or
15sexually assaulting an individual.
16b. Lacks serious literary, scientific, political, or
17artistic value.
183. “Expressive merchandise” means and includes any tangible
19personal property that contains or displays a viewpoint that
20constitutes constitutionally protected speech.
214. “Governmental entity” means and includes all of the
22following:
23a. A unit of state government in the executive, legislative,
24or judicial branch.
25b. A political subdivision of the state, including a city,
26county, township, school district, and any other governmental
27entity authorized to levy taxes.
285. “Internet site” means the same as defined in section 4.1.
296. “Massive online marketplace” means and includes an
30internet site that meets all of the following criteria:
31a. Offers tangible personal property for sale to the general
32public.
33b. Sells or facilitates the sale of protected publications
34or expressive merchandise.
35c. Has at least seventy-five million subscribers or members
-2-1in the United States in the calendar year before the date a
2court has found by a preponderance of the evidence that the
3massive online marketplace violated this chapter, or has sold
4goods to at least seventy-five million individuals in the
5United States in the calendar year before the date a court
6has found by a preponderance of the evidence that the massive
7online marketplace has violated a provision of this chapter.
87. “Massive online video sharing website” means and includes
9an internet site that meets all of the following criteria:
10a. Allows users or the public to share videos with other
11users or the public.
12b. Hosts, stores, provides, or otherwise facilitates access
13by individuals in the United States.
14c. Has at least five hundred million videos available at any
15point in time.
168. “Massive social networking website” means and includes an
17internet site that meets all of the following criteria:
18a. Allows users, through the creation of pages within
19the internet site or profiles or by other means, to provide
20information about themselves that is available to the public
21or to other users.
22b. Allows users a mechanism for communication with other
23users.
24c. Has at least twenty million subscribers or members in
25the United States in the calendar year before the date a court
26has found by a preponderance of the evidence that the massive
27social networking website has violated a provision of chapter
28554E, or has been used by at least twenty million individuals
29in the United States in the calendar year before the date a
30court has found by a preponderance of the evidence that the
31massive social networking website has violated a provision of
32this chapter.
339. “Monopolistic entity” means and includes all of the
34following:
35a. A person who, within the ten-year period preceding the
-3-1date a court has found by a preponderance of the evidence
2that the person has violated a provision of this chapter, has
3been found to have violated any state or federal antitrust or
4price-fixing law.
5b. A person who is involved in litigation in which it has
6been alleged that the person has violated any state or federal
7antitrust or price-fixing law.
810. “Obscene material” means any material depicting or
9describing the genitals, sex acts, masturbation, excretory
10functions, or sadomasochistic abuse which the average person,
11taking the material as a whole and applying contemporary
12community standards with respect to what is suitable material
13for minors, would find appeals to the prurient interest and is
14patently offensive; and the material, taken as a whole, lacks
15serious literary, scientific, political, or artistic value.
1611. “Person” means the same as defined in section 4.1.
1712. “Pre-installed application store” means and includes
18any program, application, service, or mechanism that is
19pre-installed on a mobile telephone or other portable
20electronic communication device capable of being used to write,
21send, or view an electronic message that meets all of the
22following criteria:
23a. Facilitated at least one hundred million annual downloads
24of programs or applications by individuals in the United
25States in the calendar year before the date a court has found
26by a preponderance of the evidence that the pre-installed
27application store has violated a provision of this chapter.
28b. Facilitated the download of programs or applications
29that constitute a massive online marketplace, massive online
30video sharing website, or massive social networking website
31in the calendar year before the date a court has found by
32a preponderance of the evidence that the pre-installed
33application store has violated a provision of this chapter.
3413. “Protected publication” means and includes any
35newspaper, non-fiction book, periodical, religious text, or any
-4-1other publication that contains or displays a viewpoint that
2constitutes constitutionally protected speech.
314. “Social networking website” means and includes an
4internet site that meets all of the following criteria:
5a. Allows users, through the creation of pages within
6the internet site or profiles or by other means, to provide
7information about themselves that is available to the public
8or to other users.
9b. Allows users a mechanism for communication with other
10users.
11 Sec. 4. NEW SECTION. 554E.2 Prohibition on censorship —
12ability to opt out of certain algorithms.
131. a. A company shall not intentionally affect the ability
14of a citizen of this state to view, comment, or otherwise
15interact with a United States citizen’s content on the
16company’s internet site by limiting, blocking, or otherwise
17restricting any content on the company’s internet site if the
18content constitutes constitutionally protected speech.
19b. A company shall not intentionally restrict the ability of
20a citizen of this state to download a social networking website
21on a pre-installed application store.
22c. A company shall not intentionally restrict the ability of
23a citizen of this state to purchase any protected publication
24or expressive merchandise on a massive online marketplace
25if similar protected publications or expressive merchandise
26were allowed for sale on the massive online marketplace at
27the time the company restricted the ability of a citizen of
28this state to purchase the protected publication or expressive
29merchandise.
302. Notwithstanding subsection 1, a company may do any of the
31following:
32a. Restrict the ability of a citizen of this state to
33view, comment, or otherwise interact with a United States
34citizen’s content on the company’s internet site if the
35content is criminal in nature, if the content does not
-5-1constitute constitutionally protected speech, or if the content
2constitutes any of the following:
3(1) Obscene material.
4(2) Excessively violent content.
5b. Restrict the ability of a citizen of this state to
6download a social networking website program or application
7from a pre-installed application store if the social networking
8website is being used for criminal activity and the social
9networking website does not have a policy in place to require
10its employees to notify law enforcement upon receiving a
11complaint or otherwise becoming aware of the criminal activity
12being discussed or conducted on its social networking website,
13or does not have a policy in place to require its employees
14to refer the complaint or existence of criminal activity to
15designated employees that carry out the policy.
163. a. A company shall provide its subscribers, members, and
17users who are citizens of this state with the ability to opt
18out of post promoting algorithms and shadow banning algorithms
19on the company’s massive online marketplace, massive online
20video sharing website, or massive social networking website.
21b. For purposes of this subsection:
22(1) “Post promoting algorithm” means and includes the
23mechanism, process, or set of rules that is used to sort the
24content that is visible to a subscriber, member, or user based
25on data or information possessed, used, or controlled by a
26company which relates to the subscriber, member, or user.
27(2) “Shadow banning algorithm” means and includes the
28mechanism, process, or set of rules that is used to restrict
29the visibility of a subscriber’s, member’s, or user’s content
30to other subscribers, members, or users in a way that is not
31readily apparent to the subscriber, member, or user who created
32the content.
33 Sec. 5. NEW SECTION. 554E.3 Enforcement — companies.
341. a. A court’s finding by a preponderance of the evidence
35that a company has violated a provision of this chapter shall
-6-1be conclusive proof of the company’s breach of any agreement
2between the company and a governmental entity in effect as of
3the effective date of this Act, and the governmental entity
4shall cancel the agreement effective as of the date the company
5receives the notice the governmental entity provides pursuant
6to section 554E.4, subsection 1, paragraph “b”, or if the
7governmental entity fails to send the notice, the governmental
8entity shall cancel the agreement effective thirty days after
9the effective date of this Act. Nothing in this subsection
10shall be interpreted to provide a company that did not receive
11notice a defense to a suit alleging a violation of this
12chapter or a defense to a suit alleging the company breached an
13agreement with the governmental entity.
14b. A court’s finding by a preponderance of the evidence
15that a company has violated a provision of this chapter shall
16be conclusive proof of the company’s breach of any agreement
17between the company and a governmental entity entered into
18after the effective date of this Act, and the governmental
19entity shall cancel the agreement effective as of the date of
20the court’s finding.
212. Notwithstanding any other provision of law to the
22contrary, upon a court’s finding by a preponderance of the
23evidence that a company has violated a provision of this
24chapter, the company shall be prohibited from entering into
25any future agreement with a governmental entity and shall be
26prohibited from receiving any future payments; tax credits;
27assistance under section 15.335B; sales tax exemptions or
28refunds under chapter 423; property tax credits, exemptions,
29including but not limited to exemptions under chapter 427,
30rebates, refunds, reimbursements, or grants for property taxes
31paid; or any other special benefits from a governmental entity.
32The prohibition provided in this subsection shall begin on the
33date of the court’s finding. Except as provided in section
34554E.7, the prohibition shall be for a period of twenty years.
35The twenty-year prohibition shall be reinstated for each
-7-1subsequent finding by a court pursuant to this subsection.
23. Notwithstanding any other provision of law to the
3contrary, upon a court’s finding by a preponderance of the
4evidence that a company has violated a provision of this
5chapter all of the following shall apply:
6a. Tax credits; assistance from programs and funds under
7section 15.335B; sales tax exemptions or refunds under chapter
8423; property tax credits, exemptions, including but not
9limited to exemptions under chapter 427, rebates, refunds,
10reimbursements, or grants for property taxes paid; or any
11other special benefits previously claimed by the company
12shall be recaptured or terminated by the governmental entity.
13The recapture or termination of any tax credits; assistance
14under section 15.335B; sales tax exemptions or refunds under
15chapter 423; property tax credits, exemptions, including but
16not limited to exemptions under chapter 427, rebates, refunds,
17reimbursements, or grants for property taxes paid; or any other
18special benefits previously claimed by the company pursuant
19to this subsection shall supersede any agreement previously
20entered into with the governmental entity. Recapture or
21termination pursuant to this subsection shall be accomplished
22in the same manner as provided in section 15.330, subsection
232, by the method for resolving a breach described in the
24agreement, through court action, or any other means determined
25by the attorney general to result in the most expeditious
26recapture or termination of tax credits; assistance under
27section 15.335B; sales tax exemptions or refunds under chapter
28423; property tax credits, exemptions, including but not
29limited to exemptions under chapter 427, rebates, refunds,
30reimbursements, or grants for property taxes paid; or any other
31special benefits previously claimed by the company.
32b. Payments or other quantifiable benefits received but not
33earned by the company shall be returned to the governmental
34entity.
354. Upon a court’s finding by a preponderance of the evidence
-8-1that a company has violated a provision of this chapter, the
2prohibition provided in subsection 1 and the return of received
3but not earned amounts provided in subsection 3 shall not be
4stayed during appeal proceedings.
5 Sec. 6. NEW SECTION. 554E.4 Inventory of agreements with
6companies — obligations.
71. Within thirty days following the effective date of this
8Act, a governmental entity shall do all of the following:
9a. Conduct a review of currently effective agreements;
10tax credits; assistance under section 15.335B; sales tax
11exemptions or refunds under chapter 423; property tax credits,
12exemptions, including but not limited to exemptions under
13chapter 427, rebates, refunds, reimbursements, or grants for
14property taxes paid; or any other special benefits provided by
15the governmental entity beginning January 1, 2001, through the
16effective date of this Act, to determine if any agreements, tax
17credits; assistance under section 15.335B; sales tax exemptions
18or refunds under chapter 423; property tax credits, exemptions,
19including but not limited to exemptions under chapter 427,
20rebates, refunds, reimbursements, or grants for property taxes
21paid; or any other special benefits were entered into with, or
22provided to, a company.
23b. Provide notice to a company on the form provided by the
24office of the attorney general pursuant to subsection 3, of
25the governmental entity’s rights pursuant to section 554E.3 by
26certified mail return receipt requested if the governmental
27entity determines pursuant to subsection 1 that a currently
28effective agreement; tax credit; assistance under section
2915.335B; sales tax exemption or refund under chapter 423;
30property tax credit, exemption, including but not limited to
31an exemption under chapter 427, rebate, refund, reimbursement,
32or grant for property taxes paid; or any other special benefit
33was entered into with, or provided to, the company beginning
34January 1, 2001, through the effective date of this Act.
35c. Provide the office of the attorney general with copies of
-9-1the notice and receipt of delivery provided in subsection 2.
22. A governmental entity shall include in all agreements
3to which it is a party entered into on or after the effective
4date of this Act a statement summarizing the governmental
5entity’s enforcement rights under section 554E.3 with respect
6to agreements; tax credits; assistance under section 15.335B;
7sales tax exemptions or refunds under chapter 423; property tax
8credits, exemptions, including but not limited to exemptions
9under chapter 427, rebates, refunds, reimbursements, or grants
10for property taxes paid; or any other special benefits.
113. The office of the attorney general shall develop and
12provide to governmental entities a form to be used for the
13notice provided in subsection 2 within seven days of the
14effective date of this Act.
15 Sec. 7. NEW SECTION. 554E.5 Enforcement — governmental
16entities.
17Notwithstanding any other provision of law to the contrary,
18upon a court’s finding by a preponderance of the evidence that
19a governmental entity intentionally violated a provision of
20this chapter, including but not limited to by making payments
21or providing tax credits; assistance under section 15.335B;
22sales tax exemptions or refunds under chapter 423; property tax
23credits, exemptions, including but not limited to exemptions
24under chapter 427, rebates, refunds, reimbursements, or grants
25for property taxes paid; or any other special benefits in
26violation of section 554E.3, all of the following shall apply:
271. The governmental entity’s certified budget and amount of
28taxes certified shall be reduced as provided in section 24.17,
29subsection 2, paragraph “b”.
302. If the governmental entity receives an appropriation,
31the governmental entity’s portion of each appropriation in the
32fiscal year of the court’s finding of an intentional violation
33shall be reduced by ten percent. If the governmental entity
34fails to remedy the violation of this chapter prior to the
35beginning of the subsequent fiscal year, the governmental
-10-1entity’s portion of each appropriation made by the general
2assembly for the subsequent fiscal year shall be reduced by a
3percentage equal to the percentage reduction for the preceding
4fiscal year plus five percent. All appropriation amounts
5reduced pursuant to this section shall be transferred to the
6fund from which they were appropriated.
7 Sec. 8. NEW SECTION. 554E.6 Obligations of the office of
8the attorney general.
91. The office of the attorney general shall enforce
10the provisions of this chapter, including in all appeal
11proceedings.
12a. The office of the attorney general shall appeal a
13district court’s decision if a company prevails in the district
14court in an action under this chapter.
15b. The office of the attorney general shall file an
16application for further review with the supreme court if, after
17the appeal provided in paragraph “a”, the supreme court issues
18an order of transfer and transfers the case to the court of
19appeals and the company prevails in the action before the court
20of appeals.
21c. When an appeal is taken by the office of the attorney
22general, the office shall not be required to give an appeal
23bond or security for costs.
242. a. Within sixty days following the effective date
25of this Act, the office of the attorney general shall make
26available on its internet site a system to allow a citizen of
27this state to report potential violations of this chapter by a
28company or by a governmental entity to the office.
29b. The system required pursuant to paragraph “a” shall
30include all of the following:
31(1) A mechanism for the electronic submission of
32photographs or other evidence of a company’s potential
33violation of this chapter.
34(2) An annual accounting, on a calendar year basis, of the
35number of complaints received by the office of the attorney
-11-1general related to the number of potential violations of this
2chapter by companies and governmental entities. In addition
3to the current year’s accounting, the system shall display
4annual accountings required by this subparagraph for the years
5preceding the current calendar year.
6(3) An annual accounting, on a calendar year basis, of the
7number of investigations required pursuant to subsections 3
8and 4 in which the office of the attorney general determines
9there is a reasonable suspicion that a company or governmental
10entity violated this chapter. In addition to the current
11year’s accounting, the system shall display annual accountings
12required by this subparagraph for the years preceding the
13current calendar year.
14(4) A list of the companies that a court has found by a
15preponderance of the evidence have violated this chapter.
16(5) A list of the governmental entities that a court has
17found by a preponderance of the evidence have violated this
18chapter.
19(6) A mechanism to ensure that the person submitting the
20report is a citizen of this state.
213. Notwithstanding subsection 5, the office of the attorney
22general shall complete the investigation of a report received
23pursuant to subsection 2 within thirty days of the receipt
24of the report if the report included a photograph or other
25evidence that, in the opinion of the office, indicates a
26company’s potential violation of this chapter.
274. The office of the attorney general shall contact a person
28who submits a report pursuant to subsection 2 related to a
29company’s potential violation of this chapter that did not
30contain a photograph or other evidence within seven days of
31the receipt of the report and inform the person of one of the
32following:
33a. The office will investigate the report, in which case the
34office shall complete the investigation within thirty days of
35the receipt of the report.
-12- 1b. The person has thirty days to provide the office with
2a photograph or other evidence that indicates a potential
3violation of this chapter, in which case the office shall
4complete the investigation within thirty days of the receipt of
5the photograph or other evidence.
65. a. Upon completion of an investigation in which
7the office of the attorney general determines there is a
8reasonable suspicion that a company or governmental entity has
9violated this chapter, the office shall file suit in a court
10of competent jurisdiction to enforce the provisions of this
11chapter.
12b. The office of the attorney general shall file suit for a
13violation of this chapter every four years from the date of the
14most recent court’s finding if the office determines there is
15reasonable suspicion that a company has violated this chapter
16at any point during the four-year period after the court’s most
17recent finding.
18c. The office of the attorney general shall file suit to
19enforce this chapter against a governmental entity every year
20from the date of the most recent court’s finding that the
21governmental entity has violated this chapter if the office
22determines there is reasonable suspicion that a violation of
23this chapter has occurred at any point during the one-year
24period after the court’s most recent finding.
256. All records provided to the office of the attorney
26general pursuant to this section shall be kept confidential and
27are not subject to chapter 22.
28 Sec. 9. NEW SECTION. 554E.7 Petition for stay.
291. No sooner than four years after a court’s finding that
30a company violated a provision of this chapter pursuant to
31section 554E.3, the company may petition the court for a stay
32of the provisions of section 554E.3, subsection 1.
332. At the time the company petitions the court for a stay
34pursuant to subsection 1, the company shall file with the court
35a bond payable to the state in an amount deemed necessary by
-13-1the office of the attorney general.
23. Within thirty days after a company files a petition for
3a stay pursuant to subsection 1, the office of the attorney
4general shall file with the court a statement indicating any
5reports received under section 554E.6, subsection 2, related
6to the company from the date of the court’s finding that
7the company violated a provision of this chapter pursuant to
8section 554E.3 through the date the company filed the petition
9for a stay.
104. The court shall grant the petition for stay filed
11pursuant to subsection 1 if it finds that the company did not
12violate the provisions of this chapter from the date of the
13court’s finding that the company violated a provision of this
14chapter pursuant to section 554E.3 through the date the company
15filed the petition for a stay.
16a. Beginning one year after the court grants the petition
17for stay pursuant to this subsection, the company shall
18annually file with the court an additional bond in the amount
19of any payments; tax credits; assistance under section 15.335B;
20sales tax exemptions or refunds under chapter 423; property tax
21credits, exemptions, including but not limited to exemptions
22under chapter 427, rebates, refunds, reimbursements, or grants
23for property taxes paid; or any other special benefits the
24company received from the state during the previous year.
25b. A governmental entity shall not make any payments to
26the company, or provide the company with any tax credits;
27assistance under section 15.335B; sales tax exemptions or
28refunds under chapter 423; property tax credits, exemptions,
29including but not limited to exemptions under chapter 427,
30rebates, refunds, reimbursements, or grants for property taxes
31paid; or any other special benefits, until the company has
32satisfied the requirements in paragraph “a” for the previous
33year.
345. The company shall be permanently prohibited from
35entering into any agreement with a governmental entity and
-14-1shall be permanently prohibited from receiving any payments;
2tax credits; assistance under section 15.335B; sales tax
3exemptions or refunds under chapter 423; property tax credits,
4exemptions, including but not limited to exemptions under
5chapter 427, rebates, refunds, reimbursements, or grants for
6property taxes paid; or any other special benefits from a
7governmental entity if the company violates a provision of
8this chapter after a court has granted the company’s petition
9for stay pursuant to this section and before the end of the
10twenty-year prohibition provided in section 554E.3, subsection
111.
126. The amount of any bond forfeited under this section shall
13be deposited in the general fund of the state.
147. A company shall not file more than one petition for
15a stay of the provisions of section 554E.3, subsection 1,
16during the twenty-year prohibition provided in section 554E.3,
17subsection 1.
188. Nothing in this section shall be construed to limit the
19authority of the office of the attorney general under section
20554E.6 to investigate potential violations of this chapter or
21file suit to enforce the provisions of this chapter.
22 Sec. 10. NEW SECTION. 554E.8 Right to intervene —
23enforcement by citizens of this state.
241. A governmental entity impacted by an action under this
25chapter may intervene in any action under this chapter.
262. A citizen of this state who has reported a company’s
27potential violation of this chapter pursuant to section 554E.6
28may intervene in any action related to the company under this
29chapter.
303. Notwithstanding section 554E.6, subsection 1, a citizen
31of this state who has reported a company’s potential violation
32of this chapter pursuant to section 554E.6 may file suit in a
33court of competent jurisdiction to enforce the provisions of
34this chapter if the company is not currently subject to the
35prohibition provided in section 554E.3, subsection 2, and if
-15-1the company’s potential violation of this chapter occurred at
2least thirty days following the effective date of this Act.
3 Sec. 11. NEW SECTION. 554E.9 Rules.
4The office of the attorney general shall adopt rules
5pursuant to chapter 17A to administer and interpret this
6chapter.
7 Sec. 12. LEGISLATIVE FINDINGS AND LEGISLATIVE INTENT. The
8general assembly finds all of the following:
91. The United States Constitution and the Constitution of
10the State of Iowa guarantee citizens of this state the freedom
11of speech.
122. The ability of citizens of this state to voice their
13opinions on matters that impact themselves or society generally
14is of paramount importance in order to have a healthy,
15functioning, and inclusive democracy in which every citizen can
16participate.
173. Freedom of speech is not only necessary in order
18for every citizen of this state to feel included in their
19representative democracy, but also necessary for there to be
20free and open debate so society can improve its knowledge,
21understanding, and perspective on issues that impact science,
22religion, academia, public officials, and public policy
23generally, regardless of how popular or unpopular any
24particular person, entity, speech, idea, or opinion may be.
254. The purpose of guaranteeing the freedom of speech in the
26United States Constitution and Constitution of the State of
27Iowa is to protect the people from government to ensure that
28no one person, group, or entity controls what individuals or
29society see as the truth, controls what individuals or society
30are allowed to believe or think, or controls what is and is not
31open for debate.
325. Without freedom of speech, free and open debate, and
33freedom of thought in society, individuals begin to lose faith
34and trust in science, religion, academia, public officials, and
35the legitimacy of their representative government.
-16- 16. The majority of individuals and entities voice their
2support, opposition, or opinions on science, religion,
3academics, public officials, and public policy through the
4internet.
57. A majority of individuals and entities now receive
6information and opinions about science, religion, academia,
7public officials, and public policy through the internet.
88. It can be safely concluded that the public forum where
9individuals, entities, and society generally debate the issues,
10voice their support, opposition, or opinions, obtain and
11receive information, and learn about current events has largely
12moved from the physical public square and print materials
13distributed locally, to the internet through companies.
149. Congress has provided civil immunity to many companies
15through 47 U.S.C.§230 (the Communications Decency Act),
16which allows those companies to flourish by treating them
17as distributors of information instead of publishers of
18information, which allows the companies to label, reduce
19distribution, or remove information on their platforms,
20websites, marketplaces, application stores, and the internet
21generally.
2210. Certain companies have exploited and abused the
23Communications Decency Act to the point where many citizens of
24this state are losing faith and trust in science, religion,
25academia, public officials, public policy generally, and the
26legitimacy of their representative government at all levels.
2711. Certain companies that exploit and abuse the
28Communications Decency Act have grown to such an extent that
29they dominate the marketplace such that citizens of this
30state have no real alternatives if they do not agree with the
31information moderation policies used by those companies, are
32disallowed from voicing their opinions on the platforms created
33by the companies, have their opinions and thoughts hidden
34from the general public, or are disallowed from having their
35publications sold to the general public in online marketplaces.
-17- 112. Members of Congress belonging to both parties have known
2about these abuses and exploitations of the Communications
3Decency Act for years, and congressional committees have
4released reports detailing these exploitations and abuses,
5but Congress has done nothing to reduce or prevent them from
6continuing in the future.
713. Near the end of his presidency, President Donald J.
8Trump attempted to force Congress to prevent any future harm
9caused by the continued ability of companies to exploit and
10abuse the Communications Decency Act by vetoing the National
11Defense Authorization Act, but Congress decided to override
12President Trump’s veto instead of preventing the harm and abuse
13from continuing by repealing or amending the Communications
14Decency Act.
1514. The general assembly does not have the authority to
16enact any law that is inconsistent with the Communications
17Decency Act.
1815. The general assembly does have the ability to ensure
19that the state and its political subdivisions do not give any
20taxpayer money, tax incentives, or any other benefit to the
21companies causing harm to our society by exploiting and abusing
22the Communications Decency Act.
2316. It is the intent of the general assembly that this
24Act be interpreted broadly to prevent taxpayer money, tax
25incentives, or any other benefits from being awarded to the
26companies that are the subject of this Act.
27 Sec. 13. TRANSITIONAL COMPLAINT REPORTING SYSTEM. Within
28thirty days following the effective date of this Act, and until
29fifty-nine days following the effective date of this Act, the
30office of the attorney general shall make available on its
31internet site a transitional system to allow a citizen of
32this state to report potential violations of chapter 554E by
33a company or a governmental entity to the office. The system
34shall include, at a minimum, a mechanism for the electronic
35submission of reports of potential violations of chapter 554E
-18-1and the electronic evidence associated with the potential
2violations.
3 Sec. 14. IMPLEMENTATION OF ACT. Section 25B.2, subsection
43, shall not apply to this Act.
5 Sec. 15. EFFECTIVE DATE. This Act, being deemed of
6immediate importance, takes effect upon enactment.
7 Sec. 16. APPLICABILITY. This Act applies to agreements
8between a company and a governmental entity in effect or
9entered into on or after the effective date of this Act.
10EXPLANATION
11The inclusion of this explanation does not constitute agreement with
12the explanation’s substance by the members of the general assembly.
13This bill prohibits the state or political subdivisions of
14the state from entering into contracts with, or providing tax
15incentives or any other benefits to, certain companies that
16censor online content.
17The bill requires that, before public funds are used for
18economic development, the public body dispensing the public
19funds shall consider whether a court has found that the person
20to whom the funds will be dispersed has violated a provision
21of new Code chapter 554E, and whether the person is involved
22in litigation in which it has been alleged that the person
23violated Code chapter 554E.
24The bill modifies Code section 24.17 to provide that, for
25fiscal years beginning on or after July 1, 2021, if a political
26subdivision has been found to have violated new Code chapter
27554E during the 12-month period prior to the date taxes are
28certified, the amount of the political subdivision’s budget
29certified under Code chapter 24 and the amount of taxes
30certified back to the county auditor by the department of
31management shall be reduced as described in the bill.
32The bill establishes new Code chapter 554E. The bill
33adds several defined terms to the Code chapter, including
34definitions for “company”, “excessively violent content”,
35“expressive merchandise”, “governmental entity”, “internet
-19-1site”, “massive online marketplace”, “massive online video
2sharing website”, “massive social networking website”,
3“monopolistic entity”, “obscene material”, “pre-installed
4application store”, and “social networking website”.
5The bill prohibits a company from intentionally affecting
6the ability of a citizen of this state to view, comment, or
7otherwise interact with certain content on the company’s
8internet site by restricting such content.
9The bill prohibits a company from intentionally affecting
10the ability of a citizen of this state to interact with
11certain content on the company’s internet site, restricting
12the ability of a citizen of this state to download a social
13networking website on a pre-installed application store, or
14restricting the ability of a citizen of this state to purchase
15any protected publication or expressive merchandise on a
16massive online marketplace as prescribed in the bill. The bill
17provides, however, that a company may restrict the ability
18of a citizen of this state to interact with a United States
19citizen’s content on the company’s internet site in certain
20enumerated cases.
21The bill requires a company to provide its subscribers,
22members, and users who are citizens of this state with
23the ability to opt out of post promoting algorithms and
24shadow banning algorithms on the company’s massive online
25marketplace, massive online video sharing website, or massive
26social networking website. The bill defines “post promoting
27algorithm” and “shadow banning algorithm”.
28The bill provides that a court’s finding that a company has
29violated the prohibition on censorship shall be conclusive
30proof of the company’s breach of any agreement between the
31company and a governmental entity, and the governmental entity
32shall cancel the agreement.
33The bill provides that, upon a court’s finding that a company
34has violated this prohibition on censorship, the company shall
35be prohibited from entering into any future agreement with a
-20-1governmental entity and shall be prohibited from receiving
2any future payment or any other benefit from a governmental
3entity. The bill establishes that this begins on the date of
4the court’s finding and shall extend for a period of 20 years,
5unless a stay is granted pursuant to the terms of Code section
6554E.7. Additionally, the bill establishes that this 20-year
7prohibition shall be reinstated for each subsequent finding by
8a court that a company violated the prohibition on censorship.
9The bill provides that, upon a court’s finding that a company
10has violated the prohibition on censorship, tax credits;
11assistance under Code section 15.335B; sales tax exemptions
12or refunds; property tax rebates, refunds, reimbursements, or
13grants for property taxes paid; and any other special benefits
14previously claimed by the company shall be recaptured as
15provided in the bill.
16The bill provides that the prohibition on entering into any
17agreement with a governmental entity and the requirement that
18unearned amounts be returned to governmental entities shall not
19be stayed during appeal proceedings.
20The bill requires a governmental entity to take certain
21enumerated steps with respect to companies it may have
22agreements with within 30 days of the effective date of this
23bill. The bill also requires a governmental entity to include
24in its contracts a statement summarizing the governmental
25entity’s enforcement rights under Code section 554E.3. The
26bill requires the office of the attorney general to develop a
27form describing these enforcement rights within seven days of
28the effective date of the bill.
29The bill provides that if a governmental entity
30intentionally violates Code chapter 554E, certain financial
31penalties will apply.
32The bill requires the attorney general to enforce the
33provisions of Code chapter 554E. The bill requires the
34attorney general to appeal a district court’s decision if a
35company prevails in the district court in an action under Code
-21-1chapter 554E. Additionally, the bill requires the attorney
2general to file an application for further review with the
3supreme court if, after the first appeal, the supreme court
4transfers the case to the court of appeals and the company
5prevails in the action before the court of appeals.
6The bill provides that, within 60 days of the effective
7date of the bill, the attorney general shall make available on
8its internet site a system to allow a citizen of this state to
9report potential violations of Code chapter 554E by a company
10or by a governmental entity. The bill requires this system
11to include several features. The bill establishes certain
12investigative responsibilities of the attorney general with
13respect to reports submitted through this system. The bill
14requires the attorney general to file suit in a court of
15competent jurisdiction to enforce the provisions of the Code
16chapter. The bill requires the attorney general to file suit
17for a violation of the Code chapter every four years from the
18date of the most recent court’s finding if the attorney general
19determines there is reasonable suspicion that a company has
20violated a provision of the Code chapter at any point during
21the four-year period after the court’s most recent finding.
22Additionally, the bill requires the attorney general to file
23suit to enforce the Code chapter against a governmental entity
24every year from the date of the most recent court’s finding
25that the governmental entity has violated the Code chapter if
26the office determines there is a reasonable suspicion that a
27violation of this chapter has occurred at any point during the
28one-year period after the court’s most recent finding. The
29bill provides that all records provided to the attorney general
30under Code section 554E.6 shall be kept confidential and are
31not subject to Code chapter 22.
32The bill authorizes companies that have been found to have
33violated a provision of Code chapter 554E to petition the court
34for a stay of the provisions of the Code chapter. The bill
35prescribes when this petition may be filed, how many petitions
-22-1may be filed, bonding requirements, statements that the
2attorney general must file, when a court may grant the stay,
3and what occurs in the event a company violates the provisions
4of this Code chapter again after a stay has been granted.
5The bill establishes that governmental entities impacted by
6an action under Code chapter 554E may intervene in an action
7under the Code chapter. Additionally, the bill establishes
8that a citizen of this state who has reported a company’s
9violation of the bill to the attorney general may intervene
10in any action related to that company under the Code chapter.
11The bill authorizes a citizen of this state who has reported
12a company’s violation of the bill to file suit to enforce the
13provisions of the Code chapter if the company is not currently
14subject to the prohibition provided in Code section 554E.3,
15subsection 2, and if the company’s potential violation of the
16Code chapter occurred at least 30 days following the effective
17date of the bill.
18The bill may include a state mandate as defined in Code
19section 25B.3. The bill makes inapplicable Code section 25B.2,
20subsection 3, which would relieve a political subdivision from
21complying with a state mandate if funding for the cost of
22the state mandate is not provided or specified. Therefore,
23political subdivisions are required to comply with any state
24mandate included in the bill.
25The bill authorizes the attorney general to adopt rules to
26administer and interpret Code chapter 554E.
27The bill requires the attorney general to create a
28transitional reporting system within 30 days following the
29effective date of the bill that will operate until 59 days
30following the effective date of the bill. The bill requires
31the transitional reporting system to include, at a minimum, a
32mechanism for the electronic submission of reports of potential
33violations of chapter 554E and the electronic evidence
34associated with the potential violations.
35The bill contains legislative findings and legislative
-23-1intent provisions. The provisions provide that the bill
2should be interpreted broadly to prevent taxpayer money, tax
3incentives, or any other benefits from being awarded to the
4companies that are the subject of the bill.
5The bill takes effect upon enactment and applies to
6agreements between a company and a governmental entity in
7effect or entered into on or after the effective date of the
8bill.
-24-jda/rn