S.B. 73 Online Age Verification Amendments: transcript

Thank you. Thank you, Mr. Chair. Thanks for the opportunity to be able to present. Um, lemme get squared away here. So in order to kind of give you a little bit of background where this bill comes from in 2023, um, Utah passed SB 2 87, which makes online adult websites liable for harms to minors if they do not use age verification to prevent minors from accessing harm for materials. Um, we call that age gating. So if you hear the term age gating, that's what it's about. Um, SB 73 builds on that, um, by, uh, requiring age verification. We already do that, but I'm gonna explain what this is, how this is different, and ensuring companies that produce material home for de miles help fund enforcement compliance and min, uh, and support, uh, mental health for teens. Um, unlike j verification amendments, tax on sales. So here's, here's the kind of, I'm just like getting right to it, right? Um, establishes a 2% excise tax, like a sales tax, but it's an excise tax on transac actions for content harmful to miters. Um, here's the key. Those new revenues, 90% of it goes into a, a, a restricted count mental health for early prevention treatment, public education research related to the harms of adult content to minors. 90%. The other 10% goes into, uh, the enforcing count for, for age verification. So, um, the key to that is there's no flow over to the general fund. This isn't a, a revenue driver. It's simply to offset the harms. That's it. No other way can the money be spent only for that in that vein only. There's no exception to it. Even even on the bleed off, a lot of times we'll have these accounts. We do have restriction accounts where we do bleed offs. Everything stays in this account. It doesn't get bled into the general fund ever. That's an important, important part of this bill. Um, so I'm gonna go through some of the kind of the structure as we as, as, as it's laid out in the bill, makes an affirmative requirement for adult content websites to age verify their users, to ensure that minors do not have access to harmful materials. Websites whose content, this is already in code, but I just wanted to explain it. Uh, websites whose content exceeds 33.3% adult content are subject to the bill. Um, tasks, the division of Consumer protection with enforcing age verification requirements. So again, uh, the division of Consumer Protection, who's here today, and if they see so fit to, um, possibly answer questions, if I can't answer 'em, they'll be able to do so. Establish a presumption that a website has content harmful to minors, if it may, if it markets advertises our brands itself as having content for harmful to minors. So, uh, bottom line is if you walk like a duck, quack like a duck, then you're a duck. We don't need to go look at the site, the content of the site to establish that you are you with or you're holding content harmful to the minor. Does that make sense? Um, allows the division consumer protection to set standards for age verification using privacy and data security and methods for determining whether a website contains material for harmful to minors. So I talked about the 33 and a third. This will establish in rule or allow for division of consumer protection to set up the standards for which they will establish what meets that criteria. Requires websites with material harmful to minors to enforce age gates regardless of whether ut uh, whether a Utah based user is using a VPN prohibits a website from encouraging the use of VPNs to evade a age gates. We have circumstances where there are websites that have quote unquote Geofenced Utah, so you can't actually access it. Um, but a few clicks with A VPN, you could access it. We are stating in this bill, if if somebody's accessing from Utah, you need the age gate. Um, commercial entities that violate age verification laws are knowingly retain, identifying information, shall be liable for damages, gives enforcement res uh, responsibilities to the vision of consumer protection, which may impose up to a 200 $2,500 fine. And then it appropriates money to be able to establish kind of seed money to get things going. Um, as far as the, uh, uh, online enforcement part, um, that portion of that money will, we'll, I guess we'll see how it goes. The idea is this will be a self-funded, uh, project as it goes forward. With that, I'm open for, well, let me, let me throw out a couple other things to you. I just want to point out some statistics. Um, and this goes a little bit less about the framing of the content of the bill and the policy, but kind of the, the reasoning behind it. A national survey, 51% of boys and 32% of girls encounter pornography before the age of 13. That's may be clear before the age of 13. Uh, Utah's never been interested in being average. We remain committed to leading the way and laying a strong down foundation for the, uh, future and to protect our children. There was another stat that I thought was fascinating. Um, new data from the Utah Department of Health and Human Services show significant improvements among Utah youth compared to 2023. And I'll, I'll, I'll say why that's important. Um, sharp survey with 28.4% fewer symptoms of depression or thoughts of suicide, and 23.3% fewer suicide attempts. So that since 2023, what happened in 2023? Age gating? It may be coincidental, but I think that there's some correlative, uh, you can make, you certainly can make the connection between the materials that's harmful, the minors being more difficult to access because of the requirement for, uh, uh, idea requirement for being at a dual. Um, with that, I'll submit to questions. That concludes my presentation. Thank you so much, Mr.

Yeah. Thank you, Mr. Vice Chair. Um, so I appreciate you doing this. I just wonder if you could help me understand the mechanics a little bit of this on the taxing. So it's, so if there's an online actor that's, uh, producing this material, you charge, or, or do you charge 2% to all online entities and then that goes into this pot, and then if there's an online actor that's, uh, I'm just,

Yeah, no, let me, let me give, is, is it okay, Mr. Chair, if I please? It's, um, so this is an important question. 'cause this, this took a lot to kind of work through with the Department of Consumer Protection and with the tax commission, how we was going to establish who this 2% tax is, is, is assessed to. Right. That's, is that the exactly genesis of your question. Okay. And, and this is why it was important. I established that the Department of Consumer Protection has the ability, uh, we we're giving incode their ability to, in rule, establish the procedure for them to assess as to whether or not somebody has that 33 and a third. That's the key. Then they will share that list of individuals that meet that criteria, that need to age gate, that list will go to the department of, or the, the tax commission. Then the tax commission will assess that tax only to those individuals that meet that criteria. So it's not carte blanche to everybody, it's only to the individual that beat the 33 and third. And It's 2% of what it's, it is a 2% tax. Right, Mr. Chair, please? Yes. Yeah. Um, yeah, that's a, that's a fair question. So it's 2% of whatever that transaction would be. So I, I, granted, I get there's a lot of, uh, online material that's harmful for tomorrow. That, that there is no, right, there is no fee. Right. So I, this bill started in a different place, but it be, it was really difficult to land that kind of tax. So we've, we've moved to this type, which even though this doesn't catch all of 'em, uh, uh, representative, I, I, I get it. Um, but there are many, especially, um, especially kind of the change that has taken place in entertainment industry online in general, that you can, you can, you can, uh, uh, you, I I suppose you create an account, you pay a monthly fee, that's what would get taxed. Oh,

Okay. Thanks for that clarification. Appreciate it. Yeah.

Sorry. Thank you. Appreciate it. And I apologize if you said this already, how, how will that 33 and a third be? How are they gonna determine that?

Yeah. So that, that's, that's okay. Uh, it's, it's the same question that was asked just a moment ago, but I'll, I'll, I'll restate it. 'cause maybe I didn't quite say it clear enough. So I'm not going to establish that. But that, that, that level, that 33 a third is a common kind of, uh, threshold that is in code as it pertains to this type of material. So that isn't just out of whole cloth, that that was so understand that threshold is, has been used, uh, I suppose regularly, um, in, we've established in code or in this bill, the rulemaking authority for the Division of Consumer Protection to establish the procedure. We don't know what that procedure is right now. They will establish that ter uh, procedure in rule.

How do they define what meets the 33 to third that's gonna be established? So we're not, they'll have to that online and they will Yeah. Look at it now. That's why we, so, I, I get it.

But, um, I don't know, maybe Katie. So, I mean, if there's, if there's a company, I'm, I'm gonna phone a friend just for a moment, so, okay. I'll let her kind of talk about they've already had some experience in this world, so we're not throwing them into the fire as if that's maybe where you were going Well, of having to go look at this material. I'll let Katie answer. Yeah.

So I guess my thought is if you're a company, say you, you say, I had a company that had more than this. I thought, oh, I'll pare it back just enough to get me under that 33 and a third and kind of avoid Getting captured. I'm, I'm gonna answer my thought on that, then I'll let you, it's your bill. Go for it. Yeah. Yeah. Again, I'll let you kind of talk about the other, if that's okay with you, Mr. Chair, please. Um, listen, the folks that want to do that are doing this, they're gonna do it fully and completely. They're not gonna be fiddling around whether they're not at 33 and a third or not. That being said, there may be some that could have materials that's close to that. I, I'll we have to pick a point. Yeah. Representative, I, I don't know what else to say, and that's just a point that I didn't pick that, but that it is commonly used. So, Yeah, I, I think, um, oh, sorry.

Please who, I mean come up. So, I'm Katie Haas. I'm the director of the Division of Consumer Protection. I haven't had the honor of meeting you guys. I usually end up in senate business and labor, or house business and Labor. So it's fun to be here today. Um, and we really appreciate the work that Senator Musselman has done on this and to work with us to figure out a way forward on this. So first, in the concern of having employees look at pornography, that's part of the reason why there is stuff in here about us coordinating with ICAC to help, um, people who are already trained in this and have the emotional supports, um, through the state to do this type of work. Help us identify sites that have a 33 and a third content. The second is the rulemaking, so that we can limit our own authority. This would be for us to say to a company, if we had to come in and audit you, this is what we look at. But also, Senator Musselman added in language that said, if you primarily hold yourself out as a adult website, if you are saying, I am a porn site in your name, then you are already somebody who's going to have to pay this tax, which we're not gonna have to go in and do this assessment. So it would really be for companies that are more on the fringe and maybe who are dipping their toes more and more into this. And I don't wanna name specific companies, um, but there are ones who clearly hold themselves out as adult content websites. Those are already captured because of the way they're presenting themselves to the public. It is the others that are kind of maybe a hybrid that we might ask ICAC to help us assess whether or not they're at a 33 and a third. And then we have staff who are very well versed in age assurance and trying to break into sites that say that they're doing proper age gating and maybe are not doing that proper age gating. We will also be establishing rules for Safe Harbor, for what we hold ourselves out as is the standards that need to be, um, used in order to properly age assurance. Will there always be kids who might try to get around this? Of course. Um, but we do expect companies, whether it's social media now or um, or porn sites to use a certain level of, of, um, exactness in coming up with this. And we also know that they can, um, test for VPNs and stuff like that because the gaming industry has had to do this out of Nevada. I wanna say that correctly. I'm from the East coast. I often say Nevada. Um, Nevada, um, has, um, mastered this as well. So, um, we've done a lot of research into this because of social media, and so it kind of set us up nicely to do this, um, in this space.

Yeah, I guess it's refreshing that none of us are experts here, so that's why we have to ask these questions.

Yeah. So this is really a naive question that umm throwing at you, but, uh, it, see, porn is illegal if it involves kids. Uh, you asking me? Yeah, the I believe so, yes. Yeah. So if you're, uh, Do you want, do you wanna ask the bill sponsor? Is that what you're wanting to ask here? Okay.

So the question is what, sorry, Mr. Chair? Yeah. Please restate the question. Yeah. So I'm just inquiring about, uh, the le the legality of porn, and I know it's illegal for children. Meaning, can I clarify you meaning, uh, illegal?

We, we age gate. So somebody that's under the adult age of 18. It would be, it's not the, it's not illegal for the child to access. It's illegal for the, the company to allow the child to have access. Okay. Okay.

Yeah. Okay. That, that clears it up a lot. Thank You.

Uh, thank you. I'd like to make a motion that we pass out SB 73 third substitute with the Fable recommendation.

I think the sponsor's done a, a great job to address a difficult issue and also appreciate, uh, the considerations of how to use these funds to benefit our youth.

There, there may be some concern that you might have. Um, on constitutional issues, I'm just gonna point out the same year that we passed our age gating law, there was a law that was passed in Texas. That law got challenged all the way to the Supreme Court. The Supreme Court made a decision that they would view it from an intermediate lens versus strict scrutiny as it pertains to the protection of youth. That it was a, that was a game changer, I suppose. Um, it's the first time if, in my knowledge, that they've ever made a decision to view such restraints from an intermediate, uh, view. And, and that's part of the basis for this bill, is that reality. So, uh, good on Texas. Very good. Thank you.

Thank you, Mr. Chair. This is working good. Yeah. Um, there's a sub on the system, sub one two SB 73, as well as an amendment. Um, I will be speaking to the sub after it is amended. Um, if we want to do that first, I would, I'd love for that to happen. And I can, I can go, go ahead and speak to the sub and we'll, we'll do it during committee action. Okay, perfect. Um, last, uh, two years ago, um, a good senator in our body ran a bill SB 2 87, which was, um, created age gating. And there are several other states that had done similar work. Um, during that time, that particular bill of course, passed and we had what's called age gating in our state. So those, um, online sites that were, had materials that were harmful to Mars or quote unquote porno pornographic, um, had the responsibility to age G or age verify. Uh, the same time that that happened, um, there was a bill in Texas that ran that was similar to the one that the good Senator ID ran. And that bill, uh, was challenged in the Supreme Court. Um, it went all the way to the Supreme Court, and the Supreme Court decision came down on June 27th, 2025. And I'm gonna read one quote. The statute only incidentally burdens the practical, or excuse me, the protected speech of adults that brought it down to an intermediate scrutiny, or, uh, maybe that, that may not be the best way to legally describe it, but it was, it was viewed from intermediate scrutiny. And because of that incidental burden, in other words, for somebody to access, uh, those materials, they would go through an incidental process to be able to do so. And it, it was upheld. Um, with that is born the legislation that you have before, before you today. Um, there were two things of, of concern for me. One was the actual enforcement of age gating. Right now, the way our lawsuits, it's, it's great, it's good in that a, a parent or, or, uh, a child or a parent of a child could, could, uh, bring a suit against a porn or a site that had, uh, materials on it that was, that was, uh, inappropriate for a minor. Um, if it didn't age gate. What this bill does is put enforcement, positive enforcement, um, and it houses it within the, within the, um, department of Consumer Protection. There's a couple things to that are important. That's gonna take me a bit to kind of go through this, and I want to go through it in some fair amount of detail. Um, there's a couple of issues of concern. Number one, I wanna read you a statistic. Um, a national survey. 51% of boys and 32% of girls encounter pornography before the age of 13. That's before the age of 13. That's a stunning, stunning statistic. Um, there's a couple of other stats that want I want to read to you, but I want to, uh, what some of these studies have found along with those statistics. Early exposure also increases the likelihood of sexual aggressive behavior, child abuse, involvement in sexual trafficking, and sort of views, views of relationships. Children under 12 years old who have viewed pornography statistically are more likely to, um, experience or be involved with sexual assault to their peers. Um, it's, there's clearly the, the, the mental health impact is clear. This is no longer really debated. It is absolute clear science. The question is, is what burden does it bring to the state? And my suggestion that there is a burden to the state and to resolve that takes, um, takes an offset in manpower. And to offset that, we've not only put into effect in this bill a enforcement mechanism, but also a way to help pay for, um, some of that mental health, uh, treatment for our youth. So I've created in the bill an account, and that count is a, an account that would be restricted, that was specifically reserved, um, for the treatment, uh, through HHS for the treatment of our youth that are experiencing, experiencing mental health problems. That TA tax would be a 2% excise tax. Now, I, I, I have to point out the obvious here, 2%. So I, I did a little bit of research. Much, much of pornography that's offered is there's no charge. So there will be no tax. So, but let's just say if it was an average of $50 a month, which would be, I think, fairly high for an individual, they'd pay about two, two bucks, or one, $1 rather on, on the average is probably more around 50 cents. I'd say that's an incidental hurdle for access for adult material. And I think that fits in that vein of incidental, um, and not, not prescriptive or not trying to hold back access any, any way, shape or form. So we have two sections in the bill. Again, I'm gonna re restate. We have, uh, department of Consumer Protection to do enforcement, and then the tax commission will do collection. Now, I, I think, uh, I'm gonna point out what exactly that amendment did. Uh, so that it's clear the commission shall administer the tax imposed under the chapter based on referrals of covered entities from the division in accordance with the section. And when that's saying, from the division, that's ref referring to the Consumer protection Division. So they will be the ones that will be in doing the enforcement and induce in so doing, they will, in essence, create a list of companies that will have to have age gating, and then they, they can share that list with the tax commission, and the tax commission can use that list for enforcement for the tax. Um, and vice versa, for that matter. The information can be shared back and and between the two. It's also important that we are, we are allowing the consumer protection to create rules that will enable them to establish what brings, brings a company to the level of where they should be aging. Um, and that, that, that's important because there's a definition that we have in the bill that's in our code already of 33.5% of the content on the streaming services. That rises to the level of definition in our code of what is material that's harmful for, for a child. The consumer protection will be able to establish that. They'll establish list, share that list with the, uh, with the, um, tax commission. Then the tax commission can, can collect the tax. Um, I want to go through a couple of other items here. I want to talk about the fiscal note for a moment. Originally when we did the bill, and that's just to make clarity between what's different between the original bill and this bill, we were going to establish a fee, but there's some complexities in establishing that fee on the enforcement side in order to pay for the enforcement, um, exactly who we put the fee on and, and getting kind of that, uh, work built up. And it, it, it just didn't work out. It was a little bit clunky mechanically. Um, so we pulled that out of it, and now we've just kind of, uh, uh, put some seed money in into the account in order to have the enforcement out to as much as four to five years for the consumer, uh, uh, protection division. Um, and then on the backend, as fines and or the tax collection comes in, it will go into that, that, uh, online youth protection, youth protection account. And 90% of the money that will come, whether it be fees or otherwise, will go into that, that main mental health account. But there'll be, for lack of a better term, a sub-account, uh, an account that will, uh, be held for enforcement, uh, purposes and collect for enforcement purposes. Um, so 10% would go into, into that. If that ever built up to 4 million, that would bleed off to the other, uh, the other account, which has to be explicitly and continually and for ever used, only for, um, the mental health to offset the mental health impacts of our youth. Um, I, I, I think that covers everything, Mr. Chair, if there's any questions, I'm glad to answer them.

Thank you, Mr. Chair. Uh, Senator Musselman, thank you very much appreciate, uh, your work on this bill. Uh, we talked a little bit earlier about a, a reporting back in this bill to come back and make sure that the funds are spent properly by the health youth services. Is that something that you'd be, um, favorable to putting in the build? Is that something that, uh, should be, would be helpful to try and keep track of where the funds are being spent? Yeah, I'm, I'm open to talking about that. Um, Senator, and, and I'll continue to talk with you and others. I've talked with a couple others and there's, there's advice both ways, right? We, we create the parameters of what, what we want spent and how, and we allow the agency to set the rules of how that is distributed in rule. I'm, I'm, I'm hesitant to reach in there too far, but I'm not, I'm not so hesitant that that maybe a little more detail on how we want it to be spent, might, might not, might be okay to put in, in, into code. So we'll talk more and try to see if we can nail that down if we need it. Certainly, If I can, Mr. Uh, you know, sometimes if they know they're gonna report back it, it might, uh, it might help. But, uh, just something to be thinking about. So, thank you, Mr. Chair.

Thank you very much. Senator Fillmore. Thanks, Mr. Chair. I heard the sponsor's explanation of the, the tax, but I still don't understand what we're taxing. Um, are I, am I think that some sites that provide such material you pay to access are, what was the, is this a tax on the membership fee on, on the monthly streaming fee? And I ask that because I think a lot of these websites are also free or ad supported. Um, and what are we taxing there? Um, fair enough.

So the first iteration, uh, you might see in the bill, I actually had a different tax and it was a gross receipts tax. Mm-hmm. Which would've been completely different. That presented multiple problems. Yeah. Mostly at the collection level, just it's, it's gross tax are, are difficult. Uh, number one and, and number two, uh, I, I, I simple's generally always better. Um, so, but you're absolutely right. Some of these charge zero, there's no money. So there'll be no tax, there'll be no tax on, on, on those interviews 'cause there's no, there's, there's no transaction to tax. So that's just Reality. So we are taxing a transaction. We are absolutely taxing a Transaction. And I imagine we probably can't tax the advertising revenue, right? I mean that Not unless you did a gross receipts tax, and then it could reach into it that way. Not, not, that's not how the, how the bill's designed. So, um, but there are certainly, uh, many sites that charge a monthly access fee, no different than any other streaming service. It's the same thing. So those would be, those would be, uh, those should be paying a streaming service tax as was clarified in another bill this session. But the 2% excise would be on top of that. And so that tax would be on top of that. Um, so, uh, at the beginning I had mentioned, so we're, We're taxing what people are paying for. That's right. That's right. So to kind of bring it to, in perspective, uh, I I, I did a little, little bit of research on generally what some of these sites charge. So the average consumer's probably probably gonna be, um, less than $30 a month. Mm-hmm. So you're, you're looking at less than a dollar per month in the fee in the transaction. I mean, there's obviously a fiscal note here, we expect some money. Um, That's, that's still being calculated given that the sub has made all these changes.

Right. Gotcha. All right. Yep.

Yeah. So, Um, Couple of things on this. Uh, so what I see is the kind of the startup costs on this are about $763,000, but then in, then it starts to generate revenue of 1.7 and 3.2 per year thereafter. Is that about what, how you're reading the fiscal note? I, I, I've seen, based on the changes that we're making, um, I've seen different calculations. I think on the, the bottom end, we're probably looking at probably 900. The top ends probably 1.8. Okay. So, we'll, we'll see. These are, these are hard numbers to Yeah. It's future. Yeah. It's, it's Really hard. Project may change and I totally get that. Um, but it looks like, you know, within short order, it's a net gain to the state. Um, I don't have a lot of heartburn on, uh, on taxing these industries. You know, I'm, I've, you know, I've never signed the, I've lowered taxes my entire legislative career, but I've never signed the Grover NorQuest. I'll never raise a tax 'cause there might be someone that I would like to tax. And if there is anyone, it's probably, uh, in this space because of the impact on kids. And, and this goes into a specific restricted account to minimize or at least mitigate the negative impact on the kids, as I understand it. And, and that's the important point, Senator Brammer. This is, this is meant to do exactly one thing and one thing only, not as a revenue generator for the general fund. That's why there's a restricted account. It cannot be spent in their general fund. It has to go to the general, that restricted account, and it has to be spent on the mental health of youth. That's it. Yeah. Yeah. And, and I can see why that's important, because in order to, um, you know, you're, you're walking the, you know, we're, we're kind of in a new framework legally in that intermediate scrutiny level. And so you're keeping this to the area where it is narrowly tailored to address the harm that this industry causes among youth. And so I, I see that you're doing a really good job of, of walking that intermediate scrutiny line. And I think that it's a, I think it's a good way to get at an issue that currently is being, uh, you know, is negatively impacting the state and being socialized for everyone to pay for, as opposed to the causa, the causative group on the, on a lot of those mental health issues. And so, I, I appreciate the good work on this. Thank you.

Thank you.

Yeah. Uh, I would move that we, uh, substitute the matter with the, uh, substitute SB 73 with first substitute SB 73.

You'll waive summation. Senator Musselman, I'll waive.

Would move the amendment as well.

I, I, I spoke to at the very beginning. It's just about, uh, the tax commission, uh, imposing the tax and, and, and the referrals coming from the, the Division of Consumer Protection.

Um, I guess I have lots of, I, I mean, I had questions about this when we started doing the age gating. Um, and I'm trying to, I'm trying to wrestle in my mind, um, you know, by doing this, I, I think maybe during public comment, we'll hear from the tax commission as well, but I'm a little bit concerned about administration and how we're actually going to execute on enforcing this, uh, for several reasons. Um, so we'll, we'll, I'll wait and ask those questions for the tax, for the tax commission. Um, you know, there may be, I don't know, it'll be interesting to see how this policy plays out. I think it will, I think it will pass. It's just gonna be interesting to see how that plays out.

Thank you, Mr. Chairman. I think Commissioner John Valentine, chairman of the Utah State Tax Commission. Uh, this is a fine line to be able to walk as you can really aware. And as, uh, Senator Brammer correctly identified, we are trying to stay within the bounds that the Constitution has provided specifically, how will we administer it? We aren't going to tell you totally Okay. Because we're not gonna give you the audit protocols that we're gonna use to be able to do it. But the mechanisms that are within the bill are actually pretty good, because what it does is it allows us to use the other agency to actually do the initial screening, and then we determine the audit criteria for those who are not paying the, their tax. Mm-hmm.

Yeah. In looking at the fiscal note, the, the majority of that fiscal note is coming from the tax commission with a 612,000 reprogramming, uh, uh, uh,

Cost. I'm, I'm gonna interrupt just for a second. Senator Vickers Brown, just to clarify that fiscal note, some of that is from the original.

Sure. And so that was on the gross receipt. So looking at that fiscal, it's all gonna completely change. Okay.

That is true. Okay. And an actual fact, the, the mechanisms on this one is much easier for it to us enforce Okay. To have to do a new gross receipts. Tax is a big deal, and it's, it's basically having to reprogram the whole system.

Yeah, that makes sense. We don't have have to do that for here. Okay. So that we don't have to do that for here.

So it, there doesn't have to be a, a onetime big reprogramming fee for the way There'll be a small reprogramming fee as any tax change has a reprogramming fee, but it's like in the thousands of dollars rather than the hundreds of thousands of dollars.

Okay. Thank you. That, that's great. I Appreciate that. Thank you.

Um, do you feel like, you know, as you're administering this, do you feel like we're gonna be asking state employees to look at pornography, Not Utah State Tax Commission employees, but some will have to it, because you see how the mechanism is set up?

It is on a referral basis to us. Yeah. And then we then check against our database to determine if the taxes had been paid.

Yeah. Did I Speak to that? Yeah.

So that was a concern, a legitimate concern. But to be clear, we ask state employees to look at pornography on in other areas. Right. And we, we have law enforcement officers that have to look much harder. Pornography. That being said, I've been thoughtful about that. That's why we designed that, that very amendment that I'm talking about is the, to address that as it pertains to State Tax Commission and within the Department of Consumer Protection. That's why I gave them ability to use explicit rules to design how they were gonna go about it. And we've had discussions with them trying to use other state entities to help through that process as well. So I, I've thought through that. I recognize that it's difficult sometimes there's difficult jobs. I get it. But we have a difficult world.

Yeah. I remember, uh, I had similar concerns. If I remember, I was first or second legislative session, uh, there was an audit on strip clubs and behavior that had to go on at, uh, DABS now, uh, for, you know, auditing the things that go on in, in strip clubs. And that was, I mean, that was a hard vote to put somebody in the situation where it becomes their job to audit, look at these things. And I'm, I'm hopeful that most of it's looking at a database and, and doing those things. 'cause I have hesitancy about that part. I mean, that's, it's my primary concern about all of the, you know, regulation portions. Um, I haven't seen the, the regulation that we've done so far of things change behavior. And so if what we're getting as a result is more pornography consumption as a job for, for state employees, I'm, that's, just know that that's like a flag in the back of my mind is something that I'm trying to figure out the, uh, you know, the benefit versus the reward. So, uh, that's, that's my concern.

Uh, I don't really, but I think, um, Senator Musselman may, because he's carefully correct. Crafted that aspect of it, so that the tax commission, which has really no expertise at all in that area, is enforcing attacks based upon the referral that's coming from an entity that does have to already do that.

Okay. How is, are, are, are entities already reporting already to the state on, on this behavior, or is this gonna be new? So there's, there's already age gating this mm-hmm. That's taking place, right? Right. Consumer protection's already been involved with this. And I, I've mentioned before, there's been lawsuits that are settled. That's part of where the seed buddy's coming through. Along these lines as well, How is the age gating going? That's my, you know,

I, I don't, I actually have a firm grip on how, how that's going. But as I, under, as I understand it, there's one particular site that chose not to agate and geofence the state. The state, you can't actually technically access that site unless you use A VPN. That being said, I've, I've tried to address that in this bill as well. Um, if you're viewing pornography in, in this state, those sites that are providing that, regardless of the avenue of which it's been, they've gotten there, they have a responsibility to age gate.

How would the provider know that, that, you know, that if somebody's using A VPN, they're using it to hide their location? So how would the provider know where the individual is?

That, that's a fair question. I, I've talked with consumer protection about that, and I, I don't know the answer to that. I don't. Okay. It's somewhat of a, maybe a, it's hard to say this, but an honesty policy, right? If you're, if you, if you know it's coming from your state, from the state, then age gate, Yeah. It's somewhat the same as when we did the first law. Right. I don't know that there's ever been a lawsuit filed, but there are certainly sites that have age gated since that law was passed.

Yeah. Okay. Thank you.

Good afternoon committee. I'm Corinne Johnson here today. I'm here speaking on behalf of the Child First Policy Center. And our mission is to protect children in the digital age. And we believe in common sense regulatory tools that address both access and harm. Utah has already taken important steps to address access, and this bill now will address the harms children in Utah have had access and will continue to have access to harmful sensitive materials. Age verification is not always full proof. And we have the stories from many parents who are dealing with these harms, who have struggled with children, who have become withdrawn, addicted, anxious compulsive behaviors, struggling with relationships, all of the documented harms that have been discussed here, and that we know well from the state, the actions we've taken as a state to declare pornography a public health crisis. We are grateful for this bill to address those harms, and we urge your support of its passage.

Welcome. Um, it sounded like, um, chair, you had a few questions about, um, VPNs age gating. Yeah. Um, age assurance, and I'd be happy to answer those questions to the best of my ability. My name is Katie Haas. I'm the director of the division of, uh, consumer Protection. We've been in this space for a couple years now because of the social media laws and creating rules around the social media laws to figure out what is feasible and technically feasible for companies to do. Uh, the process is incredibly frictionless these days. Um, it, there's a wide range of methods that companies can use to age verify. They each verify. And also we see in states like Nevada and other places where there's gaming, um, companies are really getting technologically savvy to get around the VPN concern that you raised. Um, it's a question of whether they're willing to do it, um, not whether they can do it. And so we think the technology is getting there to be able to tell if somebody's using a VPN coming in from a different space, and to do the things necessary in particular to age verify or age assure that somebody is an adult before they access this type of material. Um, whether it's for social media, the app store bill, or pornography, like this is kind of a space that consumers starting to be more and more engaged in, because there's many laws now that the state of Utah is passing to pro try to, to try to protect our children, um, in the online spaces that they're in or in apps. Um, so we do feel like the companies can get there. It may not be perfect. Um, there's, uh, a lot of work that we do with companies to get them there. Some of our laws are currently enjoined. Um, but whether they can age verify, many of them can, they can do that. Okay. So I, I hope that helps answer one of your questions.

Yeah. Are we, are we following through and prosecuting, or, you know, pushing our limits that haven't been enjoined?

I, I appreciate that question. I am enjoined by the federal court right now from enforcing the social media law. So I, I cannot do that today.

Yeah. What about our age gating for pornography? Um, that one is a private, um, action, uh, private right of action right now. Not that doesn't have states enforcement as I understand the sub, it will change that. Yeah. In which case then we can Okay. Absolutely.

Um, but we've also gone after alo one of the biggest porn companies for other bad behavior. Um, and which is why, um, we are familiar with the ways that they can operate and the entities that are involved.

Okay. If I, before Kay leaves, I just want to point out one other item that may be, may settle a little bit of your concerns about we had talked about earlier, and that is, uh, individuals within the tax commission or otherwise, or even within the division of con super protection on having to view, we get it, there's gonna have to be some portion of that, but there is a rebuttal on lines eight 17 through 8 23, and I'm just gonna read that verbatim real quick. There is a rebuttal presumption that a website contains a substantial portion of material harm for to Myers if the commercial entity markets or brands the website as primarily providing material harm for, to Myers uses the website name, domain name or s uh, sub-domain that indicates the website primarily provides material harmful for to Myers or advertisers promotes material harm for to Myers as a primary feature of the website. So it's kind of, in other words, if you're putting yourself up as a pornographic website, you're self-defining as such. That's, that's what that attempt, that's what that's, I think it's a upfront filtering mechanism.

Yeah. That a fair description. That is a fair description.

Yeah. I saw that language. I just, you know, trying to figure out the harms, I guess.

Thank you. I'd like to move that we pass out favorably first substitute Senate Bill 73 as amended.

I think it's a great bill.

Yeah. Um, we are removing lines 13 through 76 from the bill, which defines the division of Consumer Protection rulemaking. Um, in the app store in, there's another bill that's on the other side that's in the app store. They're removing that portion. It was, this portion we're removing was to align it with that bill, but they're removing it from that bill. So we're removing it from this bill. It's simply redacting that it's not substantive to the actual bill overall bill that, um, what we're trying to do in this bill. So it's just a removal because we want to be in line with that other bill. Thank you for that explanation.

Thanks Mr. President. Um, there's a fair amount of detail in this bill and I wanna be, make sure that I cover all, all the aspects of it. Um, so I'll, I'll be a few moments here, but in 2023, Utah passed SB 2 87 making adult websites liable for harms, uh, to minors if they did not use age verification to prevent minors from accessing harmful material. We have a good, a good senator behind me to thank for that. Um, SB 73 builds on that bill requiring age verification and ensuring companies that produce material harmful to minors help fund enforcement compliance for mental health support for teens as well. That's the overview. Here's the details. There is a tax on sales, so it establishes a 2% excise tax, like a sales tax on transactions for content harmful to minors. The use of the tax will be 90% of it will go to for mental health, early prevention treatment, public education and research related to the harms of adult content. For Myers to, to be clear, it can only go to that account, that restricted account that can't bleed over into the general fund. 10% of that which is collected will go for enforcing and age verification laws. Um, so the bill makes an affirmative requirement for adult content websites to age verify their users, uh, to ensure that minors do not have access to harmful materials. Websites whose content exceeds 33.3% of adult content or subject to the bill task. The division of consumer protection with enforcing age verification requirements establishes a presumption that a website has content for harmful to minors if it mar markets advertises or brands itself as having content harmful to minors. It allows the division of consumer protection to set a standard for the age verification. User privacy and data security and methods for determining whether the website contains material harmful to minors requires websites with material harmful to minors to enforce age gates. Regardless as to whether or not the Utah based user is using a VPN Pro Pro or using a VPN rather prohibits a website from encouraging the use of VPNs to evade age gates. Commercial entities that violate age verification laws are knowingly retain, uh, uh, identifying information shall be held liable for damages and gives enforcement responsibilities to the division of consumer protection, which may impose up to a $2,500 fine per violation and may pursue enforcement in court. It also appropriates, uh, $4 million one time to the Division of Consumer Protection Enforcement and investigation. That money is currently housed in the Department of Commerce and Futures to for future funding will or future funding will come from the tax revenues and enforcement fees. In this session, we are standing up for, uh, Utah's children. We have a responsibility to protect them. The bill expands digital protections and and discourage the reckless distribution of material harmful to minors, which directly conflicts with the core values of this great state. When children are exposed to harmful content, there's a lasting negative effects including increased rates of depression and anxiety, violent behavior, child sex abuse, and sexual trafficking. Utah leads the nation of building digital guardrails, protecting our youth, defending the republic, and restoring privacy and protecting data. This bill will directly improve mental health outcomes as the revenue from the tax on harmful materials will go directly to mental health prevention treatment and support services for Utah teens. That concludes my presentation Mr. President.

Senator Vickers Spery Aye. Lewin Bramer aye. Bus Aye. Palmore as Camilla Aye. Fillmore Grover. Aye. Kins Ipson Johnson. Aye. K Juab McKay Mikel Aye. Milner McKay i Musselman Aye. Owens Aye. Pitcher Lum rebe a Sandal Stevenson Stratton Aye. Vickers Weiler Aye. Wilson Aye. Winterton Aye. President Adams Aye. Third substitute Senate Bill 73.

Utah asked SB 2 87 making no adults websites liable for harms to minors, um, the do not use age verification and, um, that was passed and sponsored by it at the Good Senator from Davis County that sit behind me and my gratitude to him. And I think Utah was a gratitude to him as well. But this bill s to be 73 builds on that foundation. Um, it establishes a 2% exercise tax, like a sales tax on transactions for content harmful to minors. Um, use the new tax revenues as follows. Set 90% of will go into mental health, early prevention treatment, public education and research related to the harms of adult content to minors and 10% for enforcing age verification laws. It's important that I reiterate all the money, whether it be in fines or from the excise tax. We'll go into that restricted account and to, into those restricted accounts only and cannot be used for any other purpose. Um, it makes affirmative requirement for adult, uh, content websites to age verify their users, to ensure the minors do not have access to harmful material. Takes the division of Consumer Protection, uh, tasks rather, the division of Consumer Protection with enforcing age verification establishes a presumption that a website that has content harmful to minors if it markets advertises or brands itself as having content harmful to minors, allows the division of consumer protection to set standards for age verification. User privacy and data security and methods of determining whether a website contains harmful, uh, material to minors requires websites with material harmful to minors to enforce age gates. Regardless of whether whether a Utah based user is using A VPN prohibits the website from encouraging the use of VPNs to evade age gates. Commercial entities that violate age verification laws are or knowingly, um, retain identity information shall be liable for damages and, uh, gives enforcement responsibilities to division of consumer protection, which may impose up to a $2,500 per violation and may pursue enforcement in court. And lastly, it appropriates 4,000,001 time in, in the Division of Consumer Protection for Enforcement and Investigation. Future funding will come from the Tax Revenue and enforcement fines. That concludes my presentation Mr. President Pro.

Senator Vickers Baldry Lewin Brammer Bus Palmore Aye. Ms. Camilla Fillmore Grover Aye. Harper Aye. Kins Aye. Ipson Aye. Johnson Juab pass McKay Aye. Mikel Aye. Mussel Milner Musman Owens Pitcher Plum Rebe Sandal Stevenson Stratton Bickers Aye. Er aye. Wilson Aye. Winterton bus Aye. Juab Juab Johnson, president Adams Second. Our third substitute Senate Bill 73.

Thank you Mr. Speaker. Uh, Mr. Speaker. Uh, not long ago, I was invited to meet with a, a group of, uh, former, uh, social media executives that had gotten on the ground floor of, uh, social media companies and had, uh, exited with a lot of money and created their own company to help youth mental health. They described to me that they were trying to redeem their soul because they had seen what social media had done to youth and how youth were deliberately targeted. While this bill doesn't, uh, relate directly to social media, it relates to adult websites that are in the business of, uh, promulgating material harmful to minors. In 2003, we passed SB 2 87, uh, making adult or adult websites liable for harms to minors if they do not use age of verification to prevent minors from accessing harmful material. This bill adds to, plays onto that bill that we passed in 23, uh, requires age verification, uh, ensuring that, uh, compliance or the past bill required age compliance. This bill adds a 2% excise tax similar to a sales tax on transactions, uh, for content harmful to minors. The funds in that generated by this, uh, excise tax, uh, would 90% would go for youth mental health, early prevention treatment, public education, and research related to the harms of adult content to minors. 10% would go for enforcing age verification of such laws. Uh, interestingly, Mr. Speaker on the way to work today, I heard, uh, a really sad story about a family who believed that their child had died by suicide after being exposed to harmful materials. This is very, a very real issue. Um, this bill focuses on protected protecting the most digitally vulnerable our children, not restricting, restricting freedom of expression, uh, if it only applies if the entity is, uh, if, if 33% or more of their content, uh, is related to adult content. Uh, interestingly, since the bill passed in 2023, I believe, in addition to other efforts made by the legislature, if you look at the sharp survey, uh, we've seen a 28% reduction in depression and thoughts of suicide in our youth and a 23% reduction in youth suicide. So we believe that what we've been doing to protect youth in Utah is, is working. A national survey shows that 51% of boys and 32% of girls encounter pornography before the age of 13. Um, why this bill matters is because Utah is, uh, uh, uh, kind of the national standard for protecting our youth. And we know that, uh, these companies, uh, without guardrails, uh, will be focused on maximizing the bottom line instead of maximizing the wellbeing of our youth. And this bill is a step in that, that, that right direction would strongly encourage the body's support of it. Mr. Speaker, thank you.