Bill > HF451

Introduced Session

This bill prohibits the state or political subdivisions of the state from entering into contracts with, or providing tax incentives or other specified benefits to, certain companies that censor online content. The bill requires that, before public funds are used for economic development, the public body dispensing the public funds shall consider whether a court has found that the person to whom the funds will be disbursed has violated a provision of new Code chapter 554I, and whether the person is involved in litigation in which it has been alleged that the person violated Code chapter 554I. The bill modifies Code section 24.17 to provide that, for fiscal years beginning on or after July 1, 2025, if a political subdivision has been found to have violated new Code chapter 554I during the 12-month period prior to the date taxes are certified, the amount of the political subdivision’s budget certified under Code chapter 24 and the amount of taxes certified back to the county auditor by the department of management shall be reduced as described in the bill. Current law requires a county board of supervisors and a city council to post a public hearing notice on the board’s or council’s social media account. The bill provides that posting of the public hearing notice is authorized but not required. The bill establishes new Code chapter 554I. The bill adds several defined terms to the Code chapter, including definitions for “company”, “content generated by bots”, “excessively violent content”, “expressive merchandise”, “governmental entity”, “intellectual property”, “massive online marketplace”, “massive online video sharing website”, “massive social networking website”, “monopolistic entity”, “obscene material”, “pornography”, “pre-installed application store”, and “social networking website”. The bill prohibits a company from intentionally affecting the ability of a citizen of this state to view, comment, or otherwise interact with certain content on the company’s internet site by restricting such content. The bill prohibits a company from intentionally affecting the ability of a citizen of this state to interact with certain content on the company’s internet site, restricting the ability of a citizen of this state to download a social networking website on a pre-installed application store, or restricting the ability of a citizen of this state to purchase any protected publication or expressive merchandise on a massive online marketplace as prescribed in the bill. The bill provides, however, that a company may restrict the ability of a citizen of this state to interact with a United States citizen’s content on the company’s internet site in certain enumerated cases. The bill requires a company to provide its subscribers, members, and users who are citizens of this state with the ability to opt out of post promoting algorithms and shadow banning algorithms on the company’s massive online marketplace, massive online video sharing website, or massive social networking website. The bill defines “post promoting algorithm” and “shadow banning algorithm”. The bill provides that a court’s finding that a company has violated the prohibition on censorship shall be conclusive proof of the company’s breach of any agreement between the company and a governmental entity, and the governmental entity shall cancel the agreement effective as of the date described in the bill. The bill provides that, upon a court’s finding that a company has violated this prohibition on censorship, the company shall be prohibited from entering into any future agreement with a governmental entity and shall be prohibited from receiving any future payment from a governmental entity. The bill establishes that this begins on the date of the court’s finding and shall extend for a period of 20 years, unless a stay is granted. Additionally, the bill establishes that this 20-year prohibition shall be reinstated for each subsequent finding by a court that a company violated the prohibition on censorship. The bill provides that, upon a court’s finding that a company has violated the prohibition on censorship, tax credits; assistance under Code section 15.335B; sales tax exemptions or refunds; or property tax rebates, refunds, reimbursements, or grants for property taxes paid, that were previously claimed by the company, but not earned under the terms of the agreement with the governmental entity at the time of the cancellation of the agreement, shall be recaptured as provided in the bill. The bill provides that the prohibition on entering into any agreement with a governmental entity and the requirement that unearned amounts be returned to governmental entities shall not be stayed during appeal proceedings. The bill requires a governmental entity to take certain enumerated steps with respect to companies it may have agreements with within 30 days of the effective date of the bill. The bill also requires a governmental entity to include in its contracts certain statements and provisions related to the governmental entity’s enforcement rights. The bill requires the office of the attorney general to develop a form describing these enforcement rights within seven days of the effective date of the bill. The bill provides that if a governmental entity intentionally violates the bill’s provisions, certain financial penalties will apply. The bill requires the attorney general to enforce the bill. The bill requires the attorney general to appeal a district court’s decision if a company prevails in the district court in an action relating to the bill. Additionally, the bill requires the attorney general to file an application for further review with the supreme court if, after the first appeal, the supreme court transfers the case to the court of appeals and the company prevails in the action before the court of appeals. The bill requires, within 60 days of the bill’s effective date, the attorney general to make available on its internet site a system to allow a citizen of this state to report a company’s or a governmental entity’s potential violation of the bill. The bill requires this system to include several features. The bill establishes certain investigative responsibilities of the attorney general with respect to reports submitted through this system. The bill requires the attorney general to file suit in a court of competent jurisdiction to enforce the bill’s provisions, and establishes when the attorney general shall file suit. The bill provides the attorney general with certain enumerated powers. Additionally, the bill requires the attorney general to notify the department of management regarding the outcome of cases arising under the bill. The bill provides that all records provided to the attorney general under Code section 554I.6 shall be kept confidential and are not subject to Code chapter 22. The bill authorizes companies that have been found to have violated the bill to petition the court for a stay of the bill’s provisions. The bill prescribes when this petition may be filed, how many petitions may be filed, bonding requirements, statements that the attorney general must file, when a court may grant the stay, and what occurs in the event a company violates the bill again after a stay has been granted. The bill establishes that governmental entities impacted by an action under the bill may intervene in the action. Additionally, the bill establishes that a citizen of this state who has reported a company’s violation of the bill to the attorney general may intervene in any action related to that company. The bill authorizes a citizen of this state who has reported a company’s violation of the bill to file suit to enforce the bill’s provisions if the company is not currently subject to a prohibition detailed in the bill, and if the company’s potential violation occurred at least 30 days following the bill’s effective date. The bill may include a state mandate as defined in Code section 25B.3. The bill makes inapplicable Code section 25B.2, subsection 3, which would relieve a political subdivision from complying with a state mandate if funding for the cost of the state mandate is not provided or specified. By operation of law, political subdivisions are required to comply with any state mandate included in the bill. The bill authorizes the attorney general to adopt rules to administer and interpret the bill. The bill requires the attorney general to create a transitional reporting system within 30 days following the bill’s effective date that will operate until 59 days following the bill’s effective date. The bill requires the transitional reporting system to include, at a minimum, a mechanism for the electronic submission of reports of potential violations of the bill and the electronic evidence associated with the potential violations. The bill takes effect upon enactment and applies to agreements between a company and a governmental entity in effect or entered into on or after the effective date of the bill.

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Henry Stone (R)*, 

Subcommittee recommends passage. (on 02/26/2025)

Official Document