88R23121 SRA-D
By: Capriglione H.B. No. 3395
Substitute the following for H.B. No. 3395:
By: Bhojani C.S.H.B. No. 3395
A BILL TO BE ENTITLED
AN ACT
relating to the charging of swipe fees on certain electronic
payment transactions; authorizing a civil penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 12, Business & Commerce Code, is amended by
adding Chapter 610 to read as follows:
CHAPTER 610. CHARGING OF SWIPE FEES
Sec. 610.001. DEFINITIONS. In this chapter:
(1) "Assessment fee" means a fee, usually based on the
total amount of monthly sales, paid directly to the payment card
network for allowing a merchant to use a payment card or other
payment code or device in an electronic payment transaction.
(2) "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.
(3) "Interchange fee" means a fee charged to a
merchant for the purpose of compensating the payment card issuer
for the issuer's involvement in an electronic payment transaction.
(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.
(7) "State or local tax" includes a tax imposed by this
state or a unit of local government of this state, including the
sales, excise, and use tax, motor fuels tax, hotel occupancy tax,
mixed beverage sales tax, and tax imposed on the rental of a motor
vehicle, other than a tax returned to a taxpayer in the form of a
deduction or discount under Section 151.423 or 151.424, Tax Code.
(8) "Swipe fee" means the interchange fee and, if
applicable, the assessment fee.
Sec. 610.002. APPLICABILITY. This chapter applies only to
electronic payment transactions conducted by a merchant that is a
small business as defined by the United States Small Business
Administration on September 1, 2023.
Sec. 610.003. EXCLUSION OF STATE OR LOCAL TAXES FROM SWIPE
FEES; MERCHANT DEDUCTION OR REBATE. (a) The amount of state or
local tax that is calculated as a percentage of the amount of an
electronic payment transaction and listed separately on a payment
invoice or other demand for payment must be excluded from the total
amount on which a swipe fee is charged for that transaction.
(b) A payment card network shall with respect to each form
or type of electronic payment transaction:
(1) deduct the amount of state or local tax imposed
from the calculation of swipe fees attributable to the transaction
at the time of settlement; or
(2) rebate the merchant an amount equal to the amount
of swipe fees attributable to the state or local tax imposed on the
transaction.
(c) A deduction or, subject to Subsection (d), a rebate
under this section must occur at the time of settlement when the
merchant is able to capture and transmit state or local tax or fee
amounts relevant to the sale at the time of sale as part of the
transaction finalization.
(d) If a payment card network does not capture or transmit
tax or fee amounts relevant to a sale at the time of sale under
Subsection (c), a merchant may, not later than the 180th day after
the date of the sale, submit to the payment card network a request
for a rebate under Subsection (b)(2) together with proof of the tax
or fee amounts collected on the sale subject to a swipe fee. The
payment card network must accept a copy of filed tax returns or
sales data provided by the merchant as proof of the tax or fee
amounts collected on the sale. Not later than the 30th day after
the date a payment card network receives proof of the tax or fee
amounts collected on the sale from a merchant under this
subsection, the payment card network shall, in accordance with
Subsection (b)(2), rebate the merchant an amount equal to the
amount of swipe fees attributable to the state or local tax imposed
on the sale.
Sec. 610.004. CIVIL PENALTY; RESTITUTION. (a) A person who
violates this chapter is liable to this state for a civil penalty in
an amount not to exceed $1,000 for each violation.
(b) The attorney general may bring an action to:
(1) recover the civil penalty imposed under this
section; or
(2) obtain a temporary or permanent injunction to
restrain the violation.
(c) An action under this section may be brought in a
district court in:
(1) Travis County; or
(2) a county in which any part of the violation occurs.
(d) The attorney general shall deposit a civil penalty
collected under this section in the state treasury to the credit of
the general revenue fund.
(e) A person who violates this chapter shall refund a
merchant any swipe fees charged in violation of this chapter.
SECTION 2. This Act takes effect September 1, 2023.