By: Schaefer, et al. (Senate Sponsor - Schwertner) H.B. No. 2837
         (In the Senate - Received from the House May 4, 2023;
  May 5, 2023, read first time and referred to Committee on State
  Affairs; May 16, 2023, reported favorably by the following vote:  
  Yeas 8, Nays 3; May 16, 2023, sent to printer.)
Click here to see the committee vote
  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.
         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
               (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
               (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:
         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
               (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.
  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.
  (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.
  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.
  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
         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.
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