Relating to prohibiting a person or entity from surveilling, reporting, or tracking the purchase of firearms, ammunition, and accessories through the use of certain merchant category codes; imposing a civil penalty.
https://capitol.texas.gov/tlodocs/88R/billtext/html/HB02837H.htm
| 88R23301 SHH-F | |||
| By: Schaefer, Capriglione, Noble, et al. | H.B. No. 2837 | ||
| Substitute the following for H.B. No. 2837: | |||
| By: Capriglione | C.S.H.B. No. 2837 | ||
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| relating to prohibiting a person or entity from surveilling, | ||
| reporting, or tracking the purchase of firearms, ammunition, and | ||
| accessories through the use of certain merchant category codes; | ||
| imposing a civil penalty. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. This Act may be cited as the Second Amendment | ||
| Financial Privacy Act. | ||
| SECTION 2. The legislature finds that: | ||
| (1) The Second Amendment to the United States | ||
| Constitution guarantees the people the right to keep and bear arms; | ||
| (2) Section 23, Article I, of the Texas Constitution | ||
| provides that "Every citizen shall have the right to keep and bear | ||
| arms in the lawful defence of himself or the State"; | ||
| (3) In September 2022, the International Organization | ||
| for Standardization (ISO), based in Switzerland, approved a new | ||
| merchant category code for firearm and ammunition merchants; | ||
| (4) In a letter to payment card networks, federal | ||
| lawmakers stated that the new merchant category code for firearms | ||
| retailers would be ". . . the first step towards facilitating the | ||
| collection of valuable financial data that could help law | ||
| enforcement in countering the financing of terrorism efforts," | ||
| expressing a clear government expectation that payment card | ||
| networks will utilize the new merchant category code to conduct | ||
| mass surveillance of constitutionally protected firearms and | ||
| ammunition purchases in cooperation with law enforcement; | ||
| (5) The new merchant category code will allow banks, | ||
| payment card networks, acquirers, and other entities involved in | ||
| payment card processing to identify and separately track lawful | ||
| payment card purchases at firearms retailers in this state, paving | ||
| the way for unprecedented surveillance of Second Amendment activity | ||
| and information sharing between financial institutions and the | ||
| government; | ||
| (6) This potential for cooperative surveillance and | ||
| tracking of lawful firearms and ammunition purchases will have a | ||
| significant chilling effect on citizens wishing to exercise their | ||
| federal and state constitutional rights to keep and bear arms in | ||
| this state; | ||
| (7) While federal law requires some financial | ||
| institutions to report transactions that are highly indicative of | ||
| money laundering or other unlawful activities, there is no federal | ||
| or state law authorizing financial institutions to surveil and | ||
| track lawful activities by customers in cooperation with law | ||
| enforcement; | ||
| (8) The creation or maintenance of records of | ||
| purchases of firearms or ammunition or the tracking of sales made by | ||
| a retailer of firearms or ammunition by a nongovernmental entity, | ||
| including a financial institution, without a substantial and | ||
| historical business need or a requirement imposed by law, may | ||
| frustrate the right to keep and bear arms and violate the reasonable | ||
| privacy rights of lawful purchasers of firearms or ammunition; and | ||
| (9) Based on the above stated findings, it is the | ||
| intent of the legislature to prohibit the misuse of payment card | ||
| processing systems to surveil, report, or otherwise discourage | ||
| constitutionally protected firearm and ammunition purchases within | ||
| this state. | ||
| SECTION 3. Title 12, Business & Commerce Code, is amended by | ||
| adding Chapter 610 to read as follows: | ||
| CHAPTER 610. UNAUTHORIZED TRANSACTION CATEGORIZATION | ||
| Sec. 610.001. DEFINITIONS. In this chapter: | ||
| (1) "Electronic payment transaction" means a | ||
| transaction in which a person uses a payment card or other payment | ||
| code or device issued or approved through a payment card network to | ||
| debit a deposit account or use a line of credit, whether | ||
| authorization is based on a signature, personal identification | ||
| number, or other means. | ||
| (2) "Firearms code" means any merchant category code | ||
| approved by the International Organization for Standardization for | ||
| a firearms retailer, including Merchant Category Code 5723. | ||
| (3) "Firearms retailer" means any person or entity | ||
| engaged in the sale of firearms, ammunition for use in firearms, or | ||
| firearms accessories. | ||
| (4) "Payment card" means a credit card, debit card, | ||
| check card, or other card that is issued to an authorized user to | ||
| purchase or obtain goods, services, money, or any other thing of | ||
| value. | ||
| (5) "Payment card issuer" means a lender, including a | ||
| financial institution, or a merchant that receives applications and | ||
| issues payment cards to individuals. | ||
| (6) "Payment card network" means an entity that | ||
| directly or through a licensed member, processor, or agent provides | ||
| the proprietary services, infrastructure, and software that route | ||
| information and data to conduct debit card or credit card | ||
| transaction authorization, clearance, and settlement, and that an | ||
| entity uses in order to accept as a form of payment a brand of debit | ||
| card, credit card, or other device that may be used to carry out | ||
| debit or credit transactions. | ||
| Sec. 610.002. UNAUTHORIZED CATEGORIZATION OF CERTAIN | ||
| TRANSACTIONS. (a) A person or entity involved in facilitating or | ||
| processing an electronic payment transaction, including a payment | ||
| card issuer or payment card network, may not assign to a merchant or | ||
| require a merchant to use a firearms code. | ||
| (b) For the purposes of the sale of firearms, ammunition for | ||
| use in firearms, and firearms accessories, a firearms retailer may | ||
| not provide a firearms code to a payment card issuer or payment card | ||
| network and may only use or be assigned a merchant category code for | ||
| general merchandise retailers or sporting goods retailers. Any | ||
| agreement or contractual provision to the contrary is void. | ||
| (c) A payment card issuer or payment card network shall | ||
| notify the payment card holder in writing on every occasion that a | ||
| firearms code is assigned to an electronic payment transaction on | ||
| the payment card holder's account. | ||
| Sec. 610.003. INVESTIGATIVE AUTHORITY OF ATTORNEY GENERAL. | ||
| (a) If the attorney general has reasonable cause to believe that a | ||
| person or entity has engaged in, is engaging in, or is about to | ||
| engage in a violation of this chapter, the attorney general shall | ||
| issue a civil investigative demand. The procedures established for | ||
| the issuance of a civil investigative demand under Section 15.10 | ||
| apply to the same extent and manner to the issuance of a civil | ||
| investigative demand under this section. | ||
| (b) The attorney general may request, pursuant to a civil | ||
| investigative demand issued under Subsection (a), that a person or | ||
| entity disclose any data that is relevant to an investigation | ||
| conducted by the attorney general. The attorney general shall | ||
| evaluate the data for compliance with the requirements set forth in | ||
| Section 610.002. | ||
| Sec. 610.004. NOTICE OF VIOLATION OF CHAPTER; OPPORTUNITY | ||
| TO CURE. (a) Not later than the 30th day before bringing an action | ||
| under Section 610.005, the attorney general must give written | ||
| notice to the person or entity identifying the specific provisions | ||
| of this chapter that are or were being violated. | ||
| (b) The attorney general may not bring an action against the | ||
| person or entity if the person or entity: | ||
| (1) cures the identified violation within the 30-day | ||
| period; and | ||
| (2) provides the attorney general a written statement | ||
| affirming that the person or entity has: | ||
| (A) cured the alleged violation; | ||
| (B) provided supporting documentation to show | ||
| how the violation was cured; and | ||
| (C) made changes to internal policies to prevent | ||
| the recurrence of any similar violation in the future. | ||
| Sec. 610.005. ENFORCEMENT; CIVIL PENALTY; INJUNCTION. (a) | ||
| Except as provided by Section 610.006, the attorney general has | ||
| exclusive authority to enforce this chapter. | ||
| (b) A person or entity who violates this chapter and fails | ||
| to cure the violation in accordance with Section 610.004, or who | ||
| breaches a written statement provided to the attorney general under | ||
| that section, is liable for a civil penalty in the amount of $10,000 | ||
| for each violation. | ||
| (c) The attorney general shall bring an action to: | ||
| (1) recover a civil penalty under this section; and | ||
| (2) restrain or enjoin a person or entity from | ||
| violating this chapter. | ||
| (d) The attorney general may recover reasonable attorney's | ||
| fees and other reasonable expenses incurred in investigating and | ||
| bringing an action under this section. | ||
| (e) The attorney general shall deposit a civil penalty | ||
| collected under this section in the state treasury to the credit of | ||
| the general revenue fund. | ||
| Sec. 610.006. PRIVATE RIGHT OF ACTION. (a) A person who has | ||
| used a payment card to purchase a firearm, ammunition for use in a | ||
| firearm, or a firearm accessory may bring an action against a | ||
| payment card issuer or payment card network to obtain: | ||
| (1) a declaratory judgment under Chapter 37, Civil | ||
| Practice and Remedies Code, that the payment card issuer or payment | ||
| card network has violated Section 610.002; or | ||
| (2) a judgment enjoining the payment card issuer or | ||
| payment card network from violating Section 610.002. | ||
| (b) Except as provided by Subsection (a), this chapter may | ||
| not be construed as providing a basis for, or being subject to, a | ||
| private right of action for a violation of this chapter or any other | ||
| law. | ||
| SECTION 4. The changes in law made by Chapter 610, Business & | ||
| Commerce Code, as added by this Act, apply only to a purchase of a | ||
| firearm, ammunition for use in a firearm, or a firearm accessory | ||
| that takes place on or after the effective date of this Act. | ||
| SECTION 5. If any provision of this Act or its application | ||
| to any person or circumstance is held invalid, the invalidity does | ||
| not affect other provisions or applications of this Act that can be | ||
| given effect without the invalid provision or application, and to | ||
| this end the provisions of this Act are declared to be severable. | ||
| SECTION 6. This Act takes effect September 1, 2023. | ||
