Iowa Senate bill could sever incentive deals with tech firms if they lose court cases over content moderation
(The Center Square) – A bill that would prohibit Iowa political entities providing tax or economic incentives to companies that restrict Iowans from viewing certain content online advanced with a 9-5 vote in the Senate’s Ways and Means Committee.
Government entities would be prohibited from entering into agreements with companies that violate the bill, SF 571, for 20 years following a court ruling.
Sen. Zach Whiting, R-Spirit Lake, said the bill “tells these companies, ‘don’t violate the rights of Iowans and you don’t lose any of your cushy tax breaks.’”
The companies “don’t have … a fundamentally protected Constitutional right to taxpayer subsidies,” Whiting said. “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.”
Sen. Janet Petersen, D-Des Moines, voiced opposition to the bill, calling it “anti-jobs, anti-tech, anti-business, anti-growth.”
“I wish that Gov. [Kim] Reynolds would step up and talk to Republicans in the Legislature to let you know that this bill is hurting Iowa’s opportunities for business growth,” Petersen said.
The Iowa Economic Development Authority has awarded $45.7 million in investment tax credits to “four technology firms for four projects totaling $2.8 billion in investments that involve 203 new and retained jobs,” which are mostly from the authority’s High Quality Jobs Program, according to a fiscal note the committee published March 15.
“Since 2007, four technology companies have received full or partial property tax exemptions in conjunction with IEDA’s tax credit programs for six projects totaling $2.7 billion” that amounted to $766.92 million in assessed value in 2020, the note stated.
Lynn Hicks, chief of staff for the Attorney General’s office, told The Center Square in an emailed statement that the bill would require the office to hire additional staff to handle the public’s complaints and litigate against the tech companies.
“Our office has sued Facebook and Google for antitrust violations, and those lawsuits were the product of dozens of attorneys and staff from several states,” Hicks noted. “This legislation could apply to many more social networks as well as online marketplaces, app stores, and video sharing sites. In addition, the legislation could create conflicts of interest for our office: We would likely be asked to advise state agencies on implementation and compliance, while the law requires our office to sue other governmental entities, including state agencies we advise, for violations. We appreciate that legislators have listened to our concerns and continue to make changes to this bill.”
Hicks said the office has not taken a policy position on the bill.
The annual cost increase to the attorney general’s office would be about $690,000 starting in fiscal 2022, according to the fiscal note. Hiring an “experienced attorney” would cost up to $156,036 per full-time equivalent position while the cost of an “entry-level” assistant Attorney General 3 position is $115,417, while the cost of an “experienced” full-time equivalent investigator would be about $117,000 and an “entry-level” Investigator 4 position costs $72,000, the note stated.
The bill would take effect upon enactment.
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