Texas 2023 - 88th Regular

Texas House Bill HB2837 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	H.B. No. 2837
2	2
3	3
4	4	AN ACT
5	5	relating to prohibiting a person or entity from surveilling,
6	6	reporting, or tracking the purchase of firearms, ammunition, and
7	7	accessories through the use of certain merchant category codes;
8	8	imposing a civil penalty.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. This Act may be cited as the Second Amendment
11	11	Financial Privacy Act.
12	12	SECTION 2. The legislature finds that:
13	13	(1) The Second Amendment to the United States
14	14	Constitution guarantees the people the right to keep and bear arms;
15	15	(2) Section 23, Article I, of the Texas Constitution
16	16	provides that "Every citizen shall have the right to keep and bear
17	17	arms in the lawful defence of himself or the State";
18	18	(3) In September 2022, the International Organization
19	19	for Standardization (ISO), based in Switzerland, approved a new
20	20	merchant category code for firearm and ammunition merchants;
21	21	(4) In a letter to payment card networks, federal
22	22	lawmakers stated that the new merchant category code for firearms
23	23	retailers would be ". . . the first step towards facilitating the
24	24	collection of valuable financial data that could help law
25	25	enforcement in countering the financing of terrorism efforts,"
26	26	expressing a clear government expectation that payment card
27	27	networks will utilize the new merchant category code to conduct
28	28	mass surveillance of constitutionally protected firearms and
29	29	ammunition purchases in cooperation with law enforcement;
30	30	(5) The new merchant category code will allow banks,
31	31	payment card networks, acquirers, and other entities involved in
32	32	payment card processing to identify and separately track lawful
33	33	payment card purchases at firearms retailers in this state, paving
34	34	the way for unprecedented surveillance of Second Amendment activity
35	35	and information sharing between financial institutions and the
36	36	government;
37	37	(6) This potential for cooperative surveillance and
38	38	tracking of lawful firearms and ammunition purchases will have a
39	39	significant chilling effect on citizens wishing to exercise their
40	40	federal and state constitutional rights to keep and bear arms in
41	41	this state;
42	42	(7) While federal law requires some financial
43	43	institutions to report transactions that are highly indicative of
44	44	money laundering or other unlawful activities, there is no federal
45	45	or state law authorizing financial institutions to surveil and
46	46	track lawful activities by customers in cooperation with law
47	47	enforcement;
48	48	(8) The creation or maintenance of records of
49	49	purchases of firearms or ammunition or the tracking of sales made by
50	50	a retailer of firearms or ammunition by a nongovernmental entity,
51	51	including a financial institution, without a substantial and
52	52	historical business need or a requirement imposed by law, may
53	53	frustrate the right to keep and bear arms and violate the reasonable
54	54	privacy rights of lawful purchasers of firearms or ammunition; and
55	55	(9) Based on the above stated findings, it is the
56	56	intent of the legislature to prohibit the misuse of payment card
57	57	processing systems to surveil, report, or otherwise discourage
58	58	constitutionally protected firearm and ammunition purchases within
59	59	this state.
60	60	SECTION 3. Title 12, Business & Commerce Code, is amended by
61	61	adding Chapter 610 to read as follows:
62	62	CHAPTER 610. UNAUTHORIZED TRANSACTION CATEGORIZATION
63	63	Sec. 610.001. DEFINITIONS. In this chapter:
64	64	(1) "Electronic payment transaction" means a
65	65	transaction in which a person uses a payment card or other payment
66	66	code or device issued or approved through a payment card network to
67	67	debit a deposit account or use a line of credit, whether
68	68	authorization is based on a signature, personal identification
69	69	number, or other means.
70	70	(2) "Firearms code" means any merchant category code
71	71	approved by the International Organization for Standardization for
72	72	a firearms retailer, including Merchant Category Code 5723.
73	73	(3) "Firearms retailer" means any person or entity
74	74	engaged in the sale of firearms, ammunition for use in firearms, or
75	75	firearms accessories.
76	76	(4) "Payment card" means a credit card, debit card,
77	77	check card, or other card that is issued to an authorized user to
78	78	purchase or obtain goods, services, money, or any other thing of
79	79	value.
80	80	(5) "Payment card issuer" means a lender, including a
81	81	financial institution, or a merchant that receives applications and
82	82	issues payment cards to individuals.
83	83	(6) "Payment card network" means an entity that
84	84	directly or through a licensed member, processor, or agent provides
85	85	the proprietary services, infrastructure, and software that route
86	86	information and data to conduct debit card or credit card
87	87	transaction authorization, clearance, and settlement, and that an
88	88	entity uses in order to accept as a form of payment a brand of debit
89	89	card, credit card, or other device that may be used to carry out
90	90	debit or credit transactions.
91	91	Sec. 610.002. UNAUTHORIZED CATEGORIZATION OF CERTAIN
92	92	TRANSACTIONS. (a) A person or entity involved in facilitating or
93	93	processing an electronic payment transaction, including a payment
94	94	card issuer or payment card network, may not assign to a merchant or
95	95	require a merchant to use a firearms code.
96	96	(b) For the purposes of the sale of firearms, ammunition for
97	97	use in firearms, and firearms accessories, a firearms retailer may
98	98	not provide a firearms code to a payment card issuer or payment card
99	99	network and may only use or be assigned a merchant category code for
100	100	general merchandise retailers or sporting goods retailers. Any
101	101	agreement or contractual provision to the contrary is void.
102	102	(c) A payment card issuer or payment card network shall
103	103	notify the payment card holder in writing on every occasion that a
104	104	firearms code is assigned to an electronic payment transaction on
105	105	the payment card holder's account.
106	106	Sec. 610.003. INVESTIGATIVE AUTHORITY OF ATTORNEY GENERAL.
107	107	(a) If the attorney general has reasonable cause to believe that a
108	108	person or entity has engaged in, is engaging in, or is about to
109	109	engage in a violation of this chapter, the attorney general shall
110	110	issue a civil investigative demand. The procedures established for
111	111	the issuance of a civil investigative demand under Section 15.10
112	112	apply to the same extent and manner to the issuance of a civil
113	113	investigative demand under this section.
114	114	(b) The attorney general may request, pursuant to a civil
115	115	investigative demand issued under Subsection (a), that a person or
116	116	entity disclose any data that is relevant to an investigation
117	117	conducted by the attorney general. The attorney general shall
118	118	evaluate the data for compliance with the requirements set forth in
119	119	Section 610.002.
120	120	Sec. 610.004. NOTICE OF VIOLATION OF CHAPTER; OPPORTUNITY
121	121	TO CURE. (a) Not later than the 30th day before bringing an action
122	122	under Section 610.005, the attorney general must give written
123	123	notice to the person or entity identifying the specific provisions
124	124	of this chapter that are or were being violated.
125	125	(b) The attorney general may not bring an action against the
126	126	person or entity if the person or entity:
127	127	(1) cures the identified violation within the 30-day
128	128	period; and
129	129	(2) provides the attorney general a written statement
130	130	affirming that the person or entity has:
131	131	(A) cured the alleged violation;
132	132	(B) provided supporting documentation to show
133	133	how the violation was cured; and
134	134	(C) made changes to internal policies to prevent
135	135	the recurrence of any similar violation in the future.
136	136	Sec. 610.005. ENFORCEMENT; CIVIL PENALTY; INJUNCTION. (a)
137	137	Except as provided by Section 610.006, the attorney general has
138	138	exclusive authority to enforce this chapter.
139	139	(b) A person or entity who violates this chapter and fails
140	140	to cure the violation in accordance with Section 610.004, or who
141	141	breaches a written statement provided to the attorney general under
142	142	that section, is liable for a civil penalty in the amount of $10,000
143	143	for each violation.
144	144	(c) The attorney general shall bring an action to:
145	145	(1) recover a civil penalty under this section; and
146	146	(2) restrain or enjoin a person or entity from
147	147	violating this chapter.
148	148	(d) The attorney general may recover reasonable attorney's
149	149	fees and other reasonable expenses incurred in investigating and
150	150	bringing an action under this section.
151	151	(e) The attorney general shall deposit a civil penalty
152	152	collected under this section in the state treasury to the credit of
153	153	the general revenue fund.
154	154	Sec. 610.006. PRIVATE RIGHT OF ACTION. (a) A person who has
155	155	used a payment card to purchase a firearm, ammunition for use in a
156	156	firearm, or a firearm accessory may bring an action against a
157	157	payment card issuer or payment card network to obtain:
158	158	(1) a declaratory judgment under Chapter 37, Civil
159	159	Practice and Remedies Code, that the payment card issuer or payment
160	160	card network has violated Section 610.002; or
161	161	(2) a judgment enjoining the payment card issuer or
162	162	payment card network from violating Section 610.002.
163	163	(b) Except as provided by Subsection (a), this chapter may
164	164	not be construed as providing a basis for, or being subject to, a
165	165	private right of action for a violation of this chapter or any other
166	166	law.
167	167	SECTION 4. The changes in law made by Chapter 610, Business &
168	168	Commerce Code, as added by this Act, apply only to a purchase of a
169	169	firearm, ammunition for use in a firearm, or a firearm accessory
170	170	that takes place on or after the effective date of this Act.
171	171	SECTION 5. If any provision of this Act or its application
172	172	to any person or circumstance is held invalid, the invalidity does
173	173	not affect other provisions or applications of this Act that can be
174	174	given effect without the invalid provision or application, and to
175	175	this end the provisions of this Act are declared to be severable.
176	176	SECTION 6. This Act takes effect September 1, 2023.
177	177	______________________________ ______________________________
178	178	President of the Senate Speaker of the House
179	179	I certify that H.B. No. 2837 was passed by the House on May 3,
180	180	2023, by the following vote: Yeas 89, Nays 56, 2 present, not
181	181	voting.
182	182	______________________________
183	183	Chief Clerk of the House
184	184	I certify that H.B. No. 2837 was passed by the Senate on May
185	185	19, 2023, by the following vote: Yeas 19, Nays 12.
186	186	______________________________
187	187	Secretary of the Senate
188	188	APPROVED: _____________________
189	189	Date
190	190	_____________________
191	191	Governor