DES MOINES, Iowa – The Iowa Senate Ways and Means Committee passed SF 571, a bill that prohibits censorship of Iowans by Big Tech companies, by a 9 to 5 party-line vote. The Iowa Senate Commerce Committee approved the bill on March 4.
SF 571 creates a new section in Iowa Code that provides a reporting and enforcement mechanism. The law prohibits tech companies from engaging in censorship of constitutionally protected speech, with several exceptions. It also prohibits tech companies from preventing Iowans from downloading a social networking site in their application store and requires them to give Iowans the opportunity to opt-out of post-promoting and shadow-banning algorithms.
Companies found to violate the law by a “preponderance of the evidence” under the bill are prohibited from receiving sales tax exemptions or refunds; property tax credits or refunds; or rebates, refunds, reimbursements, or grants for property taxes paid. Political subdivisions may cancel any other agreement not related to tax credits 90 days after the court’s ruling at their discretion. Companies that make changes to comply with the law can apply for a stay after four years, but they will be permanently restricted if found in violation again.
Political subdivisions such as cities, counties, and school districts that violate the could see a ten percent reduction in appropriations they receive from the state if they continue to provide tax benefits to companies in violation by the end of the fiscal year. Provisions of the bill allow for future reductions if the political subdivision continues to offer tax benefits in breach of the law.
The committee voted to amend the bill to make some technical changes but did not change its substance. The Iowa Senate Ways and Means Committee had to approve the bill due to its potential fiscal impact on political subdivisions and the state.
“I would encourage a no vote on this piece of legislation. It’s anti-jobs, anti-tech, anti-business, anti-growth,” State Senator Janet Petersen, D-Des Moines, said. “How many bills do you plan to run that are going to damage Iowa’s reputation in the business community. This bill gives our state a black eye. We heard one group after another in this subcommittee talk about how much damage this is doing to economic growth. They’ve had companies that have walked away from our state just by this bill even being proposed.”
“This pandemic showed that Iowans are interested in coming home and working in our state, and they can do so with technology. And this is just another example of a piece of legislation that is going to make Iowa look like a state that is not a pro-growth, pro-business state that values businesses coming to Iowa and setting the roots here in our state,” she added.
State Senator Zach Whiting, R-Spirit Lake, spoke in favor of the bill.
“So we’ve got concerns about damage to the economy versus damage to our freedom, liberty, and our very way of life. And this bill is pretty simple. Tell us these companies don’t violate the rights of Iowans, and you don’t lose any of your cushy tax breaks,” he said.
“I’ve been getting some fun emails from folks that say, well, geez, these companies have a, you know, they have First Amendment rights. Yeah, the sky is blue. Thanks for sharing a fun fact with us. What these companies don’t have is a fundamentally protected constitutional right to taxpayer subsidies. And so, as a matter of policy, for our state to step in and say stop violating the rights of Iowans, to me, that is fantastic policy. And I’m far more concerned about upholding and protecting the rights of Iowans than I am about having these large corporations come in here and get cushy tax breaks,” he added.
State Senator Jason Schultz, R-Schleswig, managed the bill and, in his closing comments, just said the committee’s job was to review the sanctions and tax provisions in the bill to ensure they are correctly written.
“I believe that they are,” he said before moving the bill.
The bill is now eligible for debate on the Iowa Senate floor.
Listen to the committee debate below: