,,ii #aaith ,,congress #b;d ,session ,s4 #eeca ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,september #bd1 #bjbf,mr4 ,murphy introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to establish an excise tax on digital advertising1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,in ,real ,life ,act or the ,,irl ,act4 #b4 ,purpose ,the purpose of this ,act is to strengthen the social fabric that unites the ,american people to continue our #bej-year-old experiment in shared self-governance by-- 7#a7 pushing big technology companies away from business models that profit from screen addiction and cause withdrawal from in-person connection2 and 7#b7 investing in the local civic infrastructure and organizations that link citizens together in common cause4 #c4 ,excise tax on digital advertisements 7a7 ,in general ,subtitle ,d of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new chapter3 #ej;,b ,digital advertisements ,sec4 #ejjj;,e4 ,digital advertisements4 #ejjj;,e4 ,digital advertisements 7a7 ,in general ,there is hereby imposed on any person that received algorithmic digital advertising revenue during the taxable year a tax determined in accordance with the following table3 ,if algorithmic digital advertising revenue is3,the tax is3,not over #ejj1jjj1jjjj,over #ejj1jjj1jjj but not over #b1ejj1jjj1jjjaj of the excess over #ejj1jjj1jjj4,over #b1ejj1jjj1jjj but not over #e1jjj1jjj1jjjbjj1jjj1jjj1 plus #bj of the excess over #b1ejj1jjj1jjj4,over #e1jjj1jjj1jjj but not over #g1ejj1jjj1jjjgjj1jjj1jjj1 plus #cj of the excess over #e1jjj1jjj1jjj4,over #g1ejj1jjj1jjj but not over #aj1jjj1jjj1jjja1dej1jjj1jjj1 plus #dj of the excess over #g1ejj1jjj1jjj4,over #aj1jjj1jjj1jjjb1dej1jjj1jjj1 plus #ej of the excess over #aj1jjj1jjj1jjj4 7b7 ,inflation adjustment ,in the case of any taxable year beginning after ,december #ca1 #bjbg1 each dollar amount in the table in subsection 7a7 shall be increased by an amount equal to-- 7#a7 such dollar amount1 multiplied by 7#b7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which the taxable year begins1 determined by substituting calendar year #bjbf for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 ,any increase determined under the preceding sentence shall be rounded to the next lowest multiple of #a1jjj1jjj4 7c7 ,aggregation rules 7#a7 ,in general ,for purposes of the tax imposed under subsection 7a71 a corporation or partnership shall be treated as a single person for any taxable year if such entity meets the gross receipts test of section #ddh7;c7 for such taxable year1 except that for purposes of the application of paragraph 7#b7 of such section1 the reference to subsection 7b7 of section #eb shall be applied pursuant to the modifications described in paragraph 7#b74 7#b7 ,modifications ,for purposes of paragraph 7#a71 with respect to the application of subsection 7b7 of section #eb1 the term trade or business shall include any activity treated as a trade or business under paragraph 7#e7 or 7#f7 of section #dfi7;c7 7determined without regard to the phrase ,to the extent provided in regulations in such paragraph 7#f774 7#c7 ,rule of construction ,nothing in paragraph 7#b7 shall be construed to create any inference with respect to the proper application of section #eb with respect to any other provision of this title4 7d7 ,definitions ,in this section-- 7#a7 ,algorithmic digital advertising revenue ,the term algorithmic digital advertising revenue means the total gross revenue derived from the sale of any digital advertisements that are-- 7,a7 viewed from a location in the ,united ,states1 and 7,b7 displayed by a social media platform using a personalized recommendation system4 7#b7 ,digital advertisement ,the term digital advertisement means an advertisement that is served electronically over a computer network1 including the internet4 7#c7 ,personal data 7,a7 ,in general ,the term personal data means information that identifies or is linked or reasonably linkable1 alone or in combination with other information1 to an individual or a device that identifies or is linked or reasonably linkable to an individual4 7,b7 ,derived data ,the term personal data may include data that is created by the derivation of information1 data1 assumptions1 correlations1 inferences1 predictions1 or conclusions from facts1 evidence1 or another source of information or data about an individual or an individual's device4 7,c7 ,exclusion ,the term personal data does not include publicly available information4 7#d7 ,personalized recommendation system 7,a7 ,in general ,the term personalized recommendation system means a fully or partially automated system used to suggest1 promote1 or rank content1 including other users or posts1 based on the personal data of users4 7,b7 ,exception ,a system shall not be deemed to be a personalized recommendation system solely on the basis that such system only uses the following personal data of the user3 7i7 ,the type of device used by the user4 7ii7 ,the languages used by the user to communicate4 7iii7 ,the recognized place in which the user is located4 7iv7 ,the age of the user4 7,c7 ,rule of construction ,a system shall not be deemed to be a personalized recommendation system on the basis of such system-- 7i7 providing search results to a user deliberately or independently searching for 7such as by typing a phrase into a search bar or providing spoken input71 or specifically requesting1 content1 so long as such results are not based on the personal data of the user 7with the exception of personal data described in subparagraph 7,b771 7ii7 taking reasonable measures to-- 7,i7 block1 detect1 or prevent the distribution of unlawful or obscene material1 7,,ii7 block or filter spam1 or protect the security of such platform or service1 or 7,,iii7 prevent criminal activity1 or 7iii7 displaying user-generated content that has been selected1 followed1 or subscribed to by a user as long as the display of the content is based on a chronological format4 7#e7 ,recognized place 7,a7 ,in general ,the term recognized place means any of the following3 7i7 ,a ,state4 7ii7 ,indian lands4 7iii7 ,a county1 municipality1 city1 town1 township1 village1 borough1 or similar unit of general government that is incorporated pursuant to a ,state law4 7iv7 ,a census designated place 7as defined in the most recent glossary of the ,bureau of the ,census74 7v7 ,a designated market area 7as defined in section #abb7;j7 of title #ag1 ,united ,states ,code74 7vi7 ,a congressional district4 7,b7 ,exclusions ,the term recognized place does not include-- 7i7 a subdivision of any item listed in subparagraph 7,a7 that is not itself listed in such subparagraph1 or 7ii7 a ,,zip ,code4 7#f7 ,social media platform 7,a7 ,in general ,the term social media platform means a public-facing website1 online service1 online application1 or mobile application that-- 7i7 is directed to consumers1 7ii7 collects personal data1 7iii7 primarily derives revenue from advertising or the sale of personal data1 and 7iv7 as its primary function provides a community forum for user-generated content1 including messages1 videos1 and audio files among users where such content is primarily intended for viewing1 resharing1 or platform-enabled distributed social endorsement or comment4 7,b7 ,limitation ,the term social media platform does not include a platform that1 as its primary function for consumers1 provides or facilitates any of the following3 7i7 ,the purchase and sale of commercial goods4 7ii7 ,teleconferencing or videoconferencing services that allow reception and transmission of audio or video signals for real-time communication1 provided that the real-time communication is initiated by using a unique link or identifier to facilitate access4 7iii7 ,crowd-sourced reference guides such as encyclopedias and dictionaries4 7iv7 ,cloud storage1 file sharing1 or file collaboration services1 including such services that allow collaborative editing by invited users4 7v7 ,the playing or creation of video games4 7vi7 ,content that consists primarily of news1 sports1 sports coverage1 entertainment1 or other information or content that is not user-generated but is preselected by the platform and for which any chat1 comment1 or interactive functionality is incidental1 directly related to1 or dependent on the provision of the content provided by the platform4 7vii7 ,business1 product1 or travel information including user reviews or rankings of such businesses1 products1 or other travel information4 7viii7 ,educational information1 experiences1 training1 or instruction provided to build knowledge1 skills1 or a craft1 district-sanctioned or school-sanctioned learning management systems and school information systems for the purposes of schools conveying content related to the education of students1 or services or services on behalf of or in support of an elementary school or secondary school1 as such terms are defined in section #haja of the ,elementary and ,secondary ,education ,act of #aife 7#bj ,u4,s4,c4 #ghja74 7ix7 ,an email service4 7x7 ,a wireless messaging service1 including such a service provided through short message service or multimedia messaging protocols1 that is not a component of1 or linked to1 a social media platform and where the predominant or exclusive function of the messaging service is direct messaging consisting of the transmission of text1 photos1 or videos that are sent by electronic means1 where messages are transmitted from the sender to the recipient and are not posted publicly or within a social media platform4 7xi7 ,a broadband internet access service 7as such term is defined for purposes of section #h4a7;b7 of title #dg1 ,code of ,federal ,regulations1 or any successor regulation74 7xii7 ,a virtual private network or similar service that exists solely to route internet traffic between locations4 7#g7 ,state ,the term ,state means any ,state of the ,united ,states1 the ,district of ,columbia1 the ,commonwealth of ,puerto ,rico1 the ,virgin ,islands of the ,united ,states1 ,guam1 ,american ,samoa1 the ,commonwealth of the ,northern ,mariana ,islands1 and any possession of the ,united ,states4 7#h7 ,user ,the term user means1 with respect to a social media platform1 an individual who registers an account or creates a profile on the social media platform4 7e7 ,regulations and guidance 7#a7 ,in general ,the ,secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section1 including any regulations or guidance to require reporting with respect to algorithmic digital advertising revenue as is necessary and appropriate to implement and enforce the requirements under this section4 7#b7 ,consultation ,with respect to any regulations issued pursuant to paragraph 7#a71 the ,secretary may consult with other relevant ,federal agencies1 including the ,federal ,communications ,commission and the ,department of ,commerce4 4 7b7 ,social ,capital ,fund ,subchapter ,a of chapter #ih of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #ieab4 ,social ,capital ,fund 7a7 ,creation of trust fund ,there is established in the ,treasury of the ,united ,states a trust fund to be known as the ,social ,capital ,fund1 consisting of such amounts as may be-- 7#a7 appropriated to such ,trust ,fund as provided in this section1 or 7#b7 credited to such ,trust ,fund as provided in section #ifjb7;b74 7b7 ,transfers to trust fund ,there are hereby appropriated to the ,social ,capital ,fund amounts equivalent to the taxes received in the ,treasury under chapter #ej;,b4 7c7 ,expenditures from trust fund 7#a7 ,in general ,subject to paragraph 7#b71 amounts in the ,social ,capital ,fund shall be available to the ,secretary of ,housing and ,urban ,development1 without further appropriation and to remain available until expended1 to make grants for the funding of eligible activities4 7#b7 ,allocation and distribution of funds ,for purposes of making grants under paragraph 7#a7-- 7,a7 #ge percent of amounts in the ,social ,capital ,fund shall be allocated pursuant to rules similar to the rules under section #ajf of the ,housing and ,community ,development ,act of #aigd 7#db ,u4,s4,c4 #ecjf7 to recipients that-- 7i7 submit an application described in subsection 7e71 and 7ii7 are eligible for grants authorized by section #ajc of the ,housing and ,community ,development ,act of #aigd 7#db ,u4,s4,c4 #ecjc71 and 7,b7 #be percent of amounts in the ,social ,capital ,fund shall be allocated on a competitive basis to recipients that-- 7i7 submit an application described in subsection 7e71 and 7ii7 are-- 7,i7 a unit of general local government 7as defined in section #ajb7;a7 of the ,housing and ,community ,development ,act of #aigd 7#db ,u4,s4,c4 #ecjb7;a7771 7,,ii7 an organization described in section #eja7;c77#c7 and exempt from tax under section #eja7;a71 7,,iii7 a religious or civic not-for-profit organization which is at least partially governed1 operated1 and funded by individuals who are residents of the community served by such organization1 7,,iv7 an ,indian tribe 7as defined section #ajb7;a7 of the ,housing and ,community ,development ,act of #aigd 7#db ,u4,s4,c4 #ecjb7;a7771 or 7,v7 a consortium of any entities described in subclauses 7,i7 through 7,,iv74 7#c7 ,nonentitlement areas ,with respect to any allocations made pursuant to paragraph 7#b77;,a7 to ,states for use in nonentitlement areas1 such amount shall be distributed pursuant to rules similar to the rules under section #ajf of the ,housing and ,community ,development ,act of #aigd 7#db ,u4,s4,c4 #ecjf74 7d7 ,eligible activities ,for purposes of subsection 7c71 the term eligible activities means any of the following3 7#a7 ,an athletic or other recreational program operated by a governmental1 tribal1 or not-for-profit organization4 7#b7 ,construction1 renovation1 operation 7including programming71 or maintenance of-- 7,a7 parks1 trails1 playgrounds1 recreation centers1 pools1 libraries1 or other public spaces that are accessible at no cost to residents of the community1 7,b7 museums1 arts and cultural centers1 or performing arts venues that are affordable for residents of the community1 or 7,c7 beaches that are open and accessible to the public at no cost1 including training1 supplies1 uniforms1 and related infrastructure for lifeguards1 maintenance staff1 and other personnel staffing or maintaining a beach4 7#c7 ,support for any not-for-profit organization that is formed to support any of the spaces and venues described in paragraph 7#b71 such as a friends group4 7#d7 ,support for any ,parent ,teacher ,organization for a public elementary or secondary school4 7#e7 ,programs or services provided by a religious or civic not-for-profit organization which-- 7,a7 is at least partially governed1 operated1 and funded by individuals who are residents of the community served by such organization1 and 7,b7 certifies that any amounts provided under subsection 7c7 shall be used to support programs or services which are-- 7i7 not sectarian worship1 instruction1 or proselytization1 and 7ii7 made available to all residents of the community4 7#f7 ,support for locally owned small businesses that serve as social spaces for residents of the community4 7#g7 ,support for festivals or events that are open to the public at no cost4 7#h7 ,disseminating information about local civic life1 which may include opportunities to volunteer1 organizations to join1 or events to attend4 7#i7 ,support for programs to teach responsible use of technology or treat addiction to social media or artificial intelligence4 7#aj7 ,support for community development financial institutions 7as defined in section #ajc of the ,community ,development ,banking and ,financial ,institutions ,act of #aiid 7#ab ,u4,s4,c4 #dgjb77 to expand their financing for any of the activities described in paragraphs 7#a7 through 7#i74 7#aa7 ,community participation1 public outreach1 administrative costs1 and program evaluation for any of the activities described in paragraphs 7#a7 through 7#aj74 7e7 ,application ,an applicant for a grant under subsection 7c7 shall provide the ,secretary of ,housing and ,urban ,development with a detailed proposal for how the grant will help to cultivate civic life1 which shall include the following3 7#a7 ,the capacity of the applicant to implement its proposal and act as a responsible steward of ,federal funds1 including through its community partnerships and collaborative networks4 7#b7 ,the extent to which the proposal is likely to increase social connection1 trust1 and participation by people of all incomes and backgrounds in the community4 7#c7 ,the extent to which the proposal cultivates organizations that are at least partially governed1 operated1 and funded by individuals who are residents of the community by involving such organizations in the design and implementation of the proposal1 which may include encouraging the creation of new organizations4 7#d7 ,any other information deemed necessary by the ,secretary of ,housing and ,urban ,development4 7f7 ,program evaluation 7#a7 ,in general ,the ,secretary of ,housing and ,urban ,development1 acting through the ,office of ,policy ,development and ,research1 shall-- 7,a7 evaluate programs funded by this section1 and 7,b7 disseminate best practices for cultivating civic life4 7#b7 ,reporting ,any recipient of grant funding under this section shall provide reports and information deemed necessary by the ,secretary of ,housing and ,urban ,development to audit or evaluate their program4 7#c7 ,standardized metrics ,any evaluation under paragraph 7#a77;,a7 or report under paragraph 7#b7 shall utilize standardized metrics to minimize administrative and compliance costs1 including scientifically validated measurements of evidence-based components of social capital4 4 7c7 ,clerical amendments 7#a7 ,the table of chapters for subtitle ,d of the ,internal ,revenue ,code of #aihf is amended by inserting after the item relating to chapter #ej;,a the following new item3 ,chapter #ej;,b--,digital advertisements 4 7#b7 ,the table of sections for subchapter ,a of chapter #ih of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new item3 ,sec4 #ieab4 ,social ,capital ,fund4 4 7d7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbf4