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A BILL TO BE ENTITLED
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AN ACT
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relating to the charging of swipe fees on certain electronic |
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payment transactions; authorizing a civil penalty. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Title 12, Business & Commerce Code, is amended by |
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adding Chapter 610 to read as follows: |
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CHAPTER 610. CHARGING OF SWIPE FEES |
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Sec. 610.001. DEFINITIONS. In this chapter: |
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(1) "Assessment fee" means a fee, usually based on the |
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total amount of monthly sales, paid directly to the payment card |
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network for allowing a merchant to use a payment card or other |
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payment code or device in an electronic payment transaction. |
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(2) "Electronic payment transaction" means a |
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transaction in which a person uses a payment card or other payment |
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code or device issued or approved through a payment card network to |
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debit a deposit account or use a line of credit, whether |
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authorization is based on a signature, personal identification |
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number, or other means. |
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(3) "Interchange fee" means a fee charged to a |
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merchant for the purpose of compensating the payment card issuer |
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for the issuer's involvement in an electronic payment transaction. |
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(4) "Payment card" means a credit card, debit card, |
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check card, or other card that is issued to an authorized user to |
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purchase or obtain goods, services, money, or any other thing of |
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value. |
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(5) "Payment card issuer" means a lender, including a |
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financial institution, or a merchant that receives applications and |
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issues payment cards to individuals. |
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(6) "Payment card network" means an entity that |
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directly, or through a licensed member, processor, or agent, |
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provides the proprietary services, infrastructure, and software |
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that route information and data to conduct debit card or credit card |
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transaction authorization, clearance, and settlement, and that an |
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entity uses in order to accept as a form of payment a brand of debit |
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card, credit card, or other device that may be used to carry out |
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debit or credit transactions. |
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(7) "State or local tax" includes a tax imposed by this |
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state or a unit of local government of this state, including the |
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sales, excise, and use tax, motor fuels tax, hotel occupancy tax, |
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mixed beverage sales tax, and tax imposed on the rental of a motor |
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vehicle, other than a tax returned to a taxpayer in the form of a |
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deduction or discount under Section 151.423 or 151.424, Tax Code. |
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(8) "Swipe fee" means the interchange fee and, if |
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applicable, the assessment fee. |
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Sec. 610.002. APPLICABILITY. This chapter applies only to |
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electronic payment transactions conducted by a merchant that is a |
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small business as defined by the United States Small Business |
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Administration on September 1, 2023. |
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Sec. 610.003. EXCLUSION OF STATE OR LOCAL TAXES FROM SWIPE |
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FEES; MERCHANT DEDUCTION OR REBATE. (a) The amount of state or |
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local tax that is calculated as a percentage of the amount of an |
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electronic payment transaction and listed separately on a payment |
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invoice or other demand for payment must be excluded from the total |
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amount on which a swipe fee is charged for that transaction. |
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(b) A payment card network shall with respect to each form |
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or type of electronic payment transaction: |
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(1) deduct the amount of state or local tax imposed |
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from the calculation of swipe fees attributable to the transaction |
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at the time of settlement; or |
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(2) rebate the merchant an amount equal to the amount |
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of swipe fees attributable to the state or local tax imposed on the |
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transaction. |
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(c) A deduction or, subject to Subsection (d), a rebate |
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under this section must occur at the time of settlement when the |
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merchant is able to capture and transmit state or local tax or fee |
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amounts relevant to the sale at the time of sale as part of the |
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transaction finalization. |
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(d) If a payment card network does not capture or transmit |
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tax or fee amounts relevant to a sale at the time of sale under |
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Subsection (c), a merchant may, not later than the 180th day after |
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the date of the sale, submit to the payment card network a request |
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for a rebate under Subsection (b)(2) together with proof of the tax |
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or fee amounts collected on the sale subject to a swipe fee. The |
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payment card network must accept a copy of filed tax returns or |
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sales data provided by the merchant as proof of the tax or fee |
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amounts collected on the sale. Not later than the 30th day after |
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the date a payment card network receives proof of the tax or fee |
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amounts collected on the sale from a merchant under this |
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subsection, the payment card network shall, in accordance with |
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Subsection (b)(2), rebate the merchant an amount equal to the |
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amount of swipe fees attributable to the state or local tax imposed |
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on the sale. |
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Sec. 610.004. CIVIL PENALTY; RESTITUTION. (a) A person who |
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violates this chapter is liable to this state for a civil penalty in |
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an amount not to exceed $1,000 for each violation. |
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(b) The attorney general may bring an action to: |
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(1) recover the civil penalty imposed under this |
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section; or |
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(2) obtain a temporary or permanent injunction to |
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restrain the violation. |
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(c) An action under this section may be brought in a |
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district court in: |
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(1) Travis County; or |
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(2) a county in which any part of the violation occurs. |
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(d) The attorney general shall deposit a civil penalty |
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collected under this section in the state treasury to the credit of |
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the general revenue fund. |
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(e) A person who violates this chapter shall refund a |
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merchant any swipe fees charged in violation of this chapter. |
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SECTION 2. This Act takes effect September 1, 2023. |